**Schedules of Expected Cash Collections and Disbursements; Budgeted Income Statement and Budgeted Balance Sheet****Crow Enterprises** Crow Enterprises is a merchandising company preparing a master budget for the third quarter of the calendar year. Below is the company's balance sheet as of June 30th:**Crow Enterprises Balance Sheet** **June 30****Assets:** - **Cash:** $80,000 - **Accounts receivable:** $135,000 - **Inventory:** $41,250 - **Plant and equipment, net of depreciation:** $211,000 - **Total assets:** $457,250 **Liabilities and Stockholders’ Equity:** - **Accounts payable:** $72,000 - **Common stock:** $345,000 - **Retained earnings:** $50,250 - **Total liabilities and stockholders’ equity:** $467,250**Assumptions and Estimates by Management:**1. **Estimated Sales:** - July: $220,000 - August: $240,000 - September: $230,000 - October: $250,000 2. **Credit Sales Collection:** - All sales are on credit and all credit sales are collected. - 35% of each month's credit sales are collected within the same month. - 65% of the credit sales are collected in the following month. - All accounts receivable as of June 30 will be collected in July.3. **Inventory and Cost of Sales:** - Ending inventory must equal 25% of the cost of next month’s sales. - Cost of goods sold is 75% of sales. - 40% of merchandise purchases are paid in the month of purchase. - 60% are paid in the following month. - All of the accounts payable at June 30 will be paid in July.4. **Expenses:** - Selling and administrative expenses are always $40,000 per month. - $6,000 of the expenses are in cash. - $6,000 is in depreciation expense. - The remaining $34,000 relates to expenses incurred in the month they are paid.5. **Stock and Dividends:** - The company does not plan to issue any common stock or pay cash dividends during the quarter. - The quarter ends on September 30 ### Crow Enterprises Balance Sheet#### September 30**Assets**- Cash ...................................... - Accounts receivable .......... - Inventory ................................ - Plant & equipment, net ..... 193,000**Total Assets** ..................... 553,500---**Liabilities & Stockholders' Equity**- Accounts payable .............. - Common stock .................. 345,000- Retained earnings ............. 102,750**Total Liabilities & Stockholders' Equity** ................................... ---The balance sheet of Crow Enterprises as of September 30 illustrates the company's financial position, listing its assets alongside liabilities and stockholders' equity. The total assets are valued at 553,500, and the detailed components include net plant and equipment worth 193,000. On the liabilities and equity side, common stock amounts to 345,000, and retained earnings are 102,750. The balance sheet's content and figures are presented in a tabular format for clarity.

The budgeted balance sheet as on September 30 is attached below. You may kindly note that all…

ncome Statement and Budgeted Balance Sheet. Crow Enterprises is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company's balance sheet as of June 30th is shown below: Crow Enterprises Balance Sheet June 30 Assets Cash Accounts receivable $ 80,000 135,000 41,250 Plant and equipment, net of depreciation_211,000 $ 457,250 Inventory Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity S 467,250 $ 72,000 345,000 50,250 Crow's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month S6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q