Required Information TES-417 Inc. is a retaller. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-417 Inc. Balance Sheet March 31 Assets Cash $ 82,000 Accounts receivable 129.000 Inventory 52,500 Plant and equipment, net of depreciation 217,000 Total assets $ 480,500 Liabilities and Stockholders' Equity Accounts payable $ 78,000 Common stock 347,000 Retained earnings 55,500 Total liabilities and stockholders' equity $ 480,500 TES-417 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $280,000, $300,000, $290,000, and $310,000, respectively. 2. All sales are on credit. 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 March 31 will be collected in April. 3. Each month's ending inventory must equal 25% of next month's cost of goods sold. 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 March 31 are related to previous merchandise purchases and will be paid in April. 4. Monthly selling and administrative expenses are always $52.000. Each month $5,000 of this total amount is depreciation expense and the remaining $47.000 is spent for expenses that are paid in the month they are incurred. 5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock repurchase its own stock during the 2nd quarter. How much is the company's expected Accounts Receivable balance on June 30? Multiple Choice OO $195.000 $188.500 $101.500 .. $296.500 с
Required Information TES-417 Inc. is a retaller. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-417 Inc. Balance Sheet March 31 Assets Cash $ 82,000 Accounts receivable 129.000 Inventory 52,500 Plant and equipment, net of depreciation 217,000 Total assets $ 480,500 Liabilities and Stockholders' Equity Accounts payable $ 78,000 Common stock 347,000 Retained earnings 55,500 Total liabilities and stockholders' equity $ 480,500 TES-417 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $280,000, $300,000, $290,000, and $310,000, respectively. 2. All sales are on credit. 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 March 31 will be collected in April. 3. Each month's ending inventory must equal 25% of next month's cost of goods sold. 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 March 31 are related to previous merchandise purchases and will be paid in April. 4. Monthly selling and administrative expenses are always $52.000. Each month $5,000 of this total amount is depreciation expense and the remaining $47.000 is spent for expenses that are paid in the month they are incurred. 5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock repurchase its own stock during the 2nd quarter. How much is the company's expected Accounts Receivable balance on June 30? Multiple Choice OO $195.000 $188.500 $101.500 .. $296.500 с
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Required Information
TES-417 Inc. is a retaller. Its accountants are preparing the company's 2nd quarter master budget. The company has the
following balance sheet as of March 31.
TES-417 Inc.
Balance Sheet
March 31
Assets
Accounts receivable
Inventory
129,880
52, see
217,000
Plant
and equipment, net of depreciation.
Total assets
$ 480.500
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
55, see
Total liabilities and stockholders' equity
$ 480.500
TES-417 accountants have made the following estimates:
1. Sales for April, May, June, and July will be $280,000, $300,000, $290,000, and $310,000, respectively.
2. All sales are on credit. 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 March 31 will be collected in April.
3. Each month's ending inventory must equal 25% of next month's cost of goods sold. 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 March 31 are related to previous merchandise purchases and will be paid in April.
4. Monthly selling and administrative expenses are always $52.000. Each month $5,000 of this total amount is depreciation expense and the remaining $47.000 is spent for expenses that are paid in the month they are incurred.
5. The company will not borrow money or pay or declare dividends during the 2nd quarter. The company will not issue any common stock or repurchase its own stock during the 2nd quarter.
How much is the company's expected Accounts Receivable balance on June 30?
Multiple Choice
ο ο ο ο
$195.000
$188.500
$101,500
$296.500
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