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Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering Please ?

Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering Please ?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering Please ?

2. A cash budget. Show the budget by month and in total. (Round your intermediate calculations and final answers to the nearest whole dollar. Also, round down your interest calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicated by a minus sign. Do not leave any empty spaces; input a 0 wherever it is required.) Show Transcribed Text Cash balance, beginning Add receipts from customers Total cash available Less disbursements: Purchase of inventory Advertising Rent Salaries and wages Sales commissions Utilities Dividends paid Equipment purchases. Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments. Interest Total financing Cash balance, ending KNOCKOFFS UNLIMITED Cash Budget For the Three Months Ending June 30 April May June Quarter
Transcribed Image Text:2. A cash budget. Show the budget by month and in total. (Round your intermediate calculations and final answers to the nearest whole dollar. Also, round down your interest calculations to the next whole dollar amount. Cash deficiency, repayments and interest should be indicated by a minus sign. Do not leave any empty spaces; input a 0 wherever it is required.) Show Transcribed Text Cash balance, beginning Add receipts from customers Total cash available Less disbursements: Purchase of inventory Advertising Rent Salaries and wages Sales commissions Utilities Dividends paid Equipment purchases. Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments. Interest Total financing Cash balance, ending KNOCKOFFS UNLIMITED Cash Budget For the Three Months Ending June 30 April May June Quarter
Knockoffs Unlimited, a nationwide distributor of low-cost imitation designer necklaces, has an exclusive franchise on the distribution of the necklaces, and sales have grown so rapidly over the past few years that it has become necessary to add new members to the management team. To date, the company's budgeting practices have been inferior, and at times the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are eager to make a favourable impression on the president and have assembled the information below. The necklaces are sold to retailers for $10 each. Recent and forecast sales in units are as follows:: January (actual) February (actual) March (actual) April May The large buildup in sales before and during May is due to Mother's Day. Ending inventories should be equal to 40% of the next month's sales in units. Show Transcribed Text The necklaces cost the company $4 each. Purchases are paid for as follows: 50% in the month of purchase and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a month's sales are collected by month-end. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Variable: 20, 500 June 27,000 July 40,000 August 66,000 100, 000 Sales commissions The company's monthly selling and administrative expenses are given below: Fixed: Advertising Rent Vages and salaries September Utilities Insurance Depreciation 4% of sales $203, 000 18,500 107, 200 Inventory Prepaid insurance Fixed assets, net of depreciation Total assets 51,000 31,000 29,000 26,000 7,400 3,200 15,000 All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $16,400 in new equipment during May and $41,000 in new equipment during June; both purchases will be paid in cash. The company declares dividends of $15,200 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below: Cash Accounts receivable ($27,000 February sales, $320, 000 March sales) Accounts payable Dividends payable Common shares Retained earnings Total liabilities and shareholders' equity Annota Liabilities and Shareholders' Equity $ 75,000 347,000 105, 600 22, 400 955, 000 $1,505, 000 $ 100, 800 15, 200 810, 000 579,000 $1,505, 000
Transcribed Image Text:Knockoffs Unlimited, a nationwide distributor of low-cost imitation designer necklaces, has an exclusive franchise on the distribution of the necklaces, and sales have grown so rapidly over the past few years that it has become necessary to add new members to the management team. To date, the company's budgeting practices have been inferior, and at times the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are eager to make a favourable impression on the president and have assembled the information below. The necklaces are sold to retailers for $10 each. Recent and forecast sales in units are as follows:: January (actual) February (actual) March (actual) April May The large buildup in sales before and during May is due to Mother's Day. Ending inventories should be equal to 40% of the next month's sales in units. Show Transcribed Text The necklaces cost the company $4 each. Purchases are paid for as follows: 50% in the month of purchase and the remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a month's sales are collected by month-end. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible. Variable: 20, 500 June 27,000 July 40,000 August 66,000 100, 000 Sales commissions The company's monthly selling and administrative expenses are given below: Fixed: Advertising Rent Vages and salaries September Utilities Insurance Depreciation 4% of sales $203, 000 18,500 107, 200 Inventory Prepaid insurance Fixed assets, net of depreciation Total assets 51,000 31,000 29,000 26,000 7,400 3,200 15,000 All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $16,400 in new equipment during May and $41,000 in new equipment during June; both purchases will be paid in cash. The company declares dividends of $15,200 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below: Cash Accounts receivable ($27,000 February sales, $320, 000 March sales) Accounts payable Dividends payable Common shares Retained earnings Total liabilities and shareholders' equity Annota Liabilities and Shareholders' Equity $ 75,000 347,000 105, 600 22, 400 955, 000 $1,505, 000 $ 100, 800 15, 200 810, 000 579,000 $1,505, 000
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