The budget committee of Clipboard Office Supply has assembled the following data.Sales in April are expected to be $48,000. Clipboard forecasts that monthly sales willa.increase 5% over April sales in May. June's sales will increase by 10% over April sales. Julysales will increase 15% over April sales. Cash receipts are 80% in the month of the sale and20% in the month following the sale.b. Clipboard maintains inventory of $9,000 plus 25% of the cost of goods sold budgeted forthe following month. Cost of goods sold equal 50% of sales revenue. Purchases are paid 40%in the month of the purchase and 60% in the month following the purchase.c. Monthly salaries amount to $6,000. Sales commissions equal 5% of sales for that month.Salaries and commissions are paid 60% in the month incurred and 40% in the followingmonth.d. Other monthly expenses are as follows:Rent: $2,800, paid as incurred Depreciation: $300Insurance: $100, expiration of prepaid amount Income tax: $1,700, paid as incurredRequirements1. Prepare Clipboard's sales budget for April and May 2020. Round all amounts to the nearest dollar.2. Prepare Clipboard's inventory, purchases, and cost of goods sold budget for April and May.3. Prepare Clipboard's selling and administrative expense budget for April and May. Preparing an operating budgetClipboard Office Supply's March 31, 2020, balance sheet follows:CLIPBOARD OFFICE SUPPLYBalance SheetMarch 31, 2020AssetsCurrent Assets:Cash$ 28,000Accounts Receivable11,500Merchandise Inventory15,000Prepaid Insurance1,000Total Current Assets$ 55,500Property, Plant, and Equipment:Equipment and Fixtures55,000Less: Accumulated Depreciation(20,000)35,000Total Assets$ 90,500LiabilitiesCurrent Liabilities:Accounts Payable$ 10,500Salaries and Commissions Payable1,200Total Liabilities$ 11,700Stockholders' EquityCommon Stock25,000Retained Earnings53,800Total Stockholders' Equity78,800Total Liabilities and Stockholders' Equity$ 90,500

Sales budget; The sales budget is prepared to estimate or project the sales in dollars and units for…

The budget committee of Clipboard Office Supply has assembled the following data. Sales in April are expected to be $48,000. Clipboard forecasts that monthly sales will a. increase 5% over April sales in May. June's sales will increase by 10% over April sales. July sales will increase 15% over April sales. Cash receipts are 80% in the month of the sale and 20% in the month following the sale. b. Clipboard maintains inventory of $9,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Purchases are paid 40% in the month of the purchase and 60% in the month following the purchase. c. Monthly salaries amount to $6,000. Sales commissions equal 5% of sales for that month. Salaries and commissions are paid 60% in the month incurred and 40% in the following month.

The budget committee of Clipboard Office Supply has assembled the following data. Sales in April are expected to be $48,000. Clipboard forecasts that monthly sales will a. increase 5% over April sales in May. June's sales will increase by 10% over April sales. July sales will increase 15% over April sales. Cash receipts are 80% in the month of the sale and 20% in the month following the sale. b. Clipboard maintains inventory of $9,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Purchases are paid 40% in the month of the purchase and 60% in the month following the purchase. c. Monthly salaries amount to $6,000. Sales commissions equal 5% of sales for that month. Salaries and commissions are paid 60% in the month incurred and 40% in the following month.

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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