Required: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget.
Required: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget.
Required: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget.
Required: Using the preceding data: Complete the schedule of expected cash collections. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. Complete the cash budget. Complete this question by entering your answers in the tabs below. Required 3 Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 7,200 Accounts receivable $ 18,800 Inventory $ 37,800 Building and equipment, net $ 123,600 Accounts payable $ 22,425 Common stock $ 150,000 Retained earnings $ 14,975 The gross margin is 25% of sales. Actual and budgeted sales data: March (actual) $ 47,000 April $ 63,000 May $ 68,000 June $ 93,000 July $ 44,000 Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,000 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $927 per month (includes depreciation on new assets). Equipment costing $1,200 will be purchased for cash in April. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Transcribed Image Text:Required:
Using the preceding data:
1. Complete the schedule of expected cash collections.
2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.
3. Complete the cash budget.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3
Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases.
Merchandise Purchases Budget
April
May
June
Quarter
Budgeted cost of goods sold
$
47,250 $
51,000
Add desired ending merchandise inventory
40,800
Total needs
88,050
51,000
0
0
Less beginning merchandise inventory
37,800
$ 50,250 $
51,000 $
0
$
0
Required purchases
Budgeted cost of goods sold for April = $63,000 sales × 75% = $47,250.
Add desired ending inventory for April = $51,000 × 80% = $40,800.
Schedule of Expected Cash Disbursements-Merchandise Purchases
March purchases
April purchases
May purchases
June purchases
$
April
22,425
25,125
May
25,125
June
Quarter
$
22,425
50,250
Total disbursements
$ 47,550 $ 25,125
$
0
$
72,675
< Required 1
Required 3
>
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
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