The following is selected information relating to the operations of Ramblewood Plc a wholesaledistributer.Current Assets as at 31 MarchCash 8 000Accounts receivable 20 000Inventory 36 000Plant and Equipment net 120 000Accounts Payable 21 750Capital Stock 150 000Retained earnings 12 250a.) Gross profit is 25% of salesb.) Actual and budgeted sales data:March (actual) 50 000April 60 000May 72 000June 90 000July 48 000 c.) Sales are 60% for cash and 40% on credit. Credit sales are collected in the monthfollowing the sale. The account receivables at March 31 are a result of March credit sales.d.) At the end of each month , inventory is to be on hand equal to 80% of the followingmonths sales needs, stated at cost.e.) One half of a month’s inventory purchases is paid for in the following month. Theaccounts payable at March 31 are a result of March purchases of inventory.f.) Monthly expenses are as follows: salaries and wages, 12% of sales; rent, $2500 permonth; other expenses (excluding depreciation), 6% of sales. Assume that these expensesare paid monthly. Depreciation is $900 per month (includes depreciation on new assets).g.) Equipment costing $1 500 will be purchase in for cash in April.h.) The company must maintain a minimum balance of$4 000. An open line of credit isavailable at a local bank. All borrowing is done at the beginning of the month, and all 4 repayments are made at the end of a month; borrowing must be in multiple of $1 000.The annual interest rate i s12%. Interest is paid only at the time of repayment of principal. Required: Using the data above prepare:1.) Schedule of expected cash collection 2.) Inventory purchase budget 3.) Schedule of expected cash disbursements – purchases 4.) Schedule of expected cash disbursements- Operating expenses 5.) The cash budget for the three months- April ,May and June 6.) Income statement for the three months ended June 30. 7.) Balance Sheet as of the June 30 [
The following is selected information relating to the operations of Ramblewood Plc a wholesale
distributer.
Current Assets as at 31 March
Cash 8 000
Accounts receivable 20 000
Inventory 36 000
Plant and Equipment net 120 000
Accounts Payable 21 750
Capital Stock 150 000
Retained earnings 12 250
a.) Gross profit is 25% of sales
b.) Actual and budgeted sales data:
March (actual) 50 000
April 60 000
May 72 000
June 90 000
July 48 000
c.) Sales are 60% for cash and 40% on credit. Credit sales are collected in the month
following the sale. The account receivables at March 31 are a result of March credit sales.
d.) At the end of each month , inventory is to be on hand equal to 80% of the following
months sales needs, stated at cost.
e.) One half of a month’s inventory purchases is paid for in the following month. The
accounts payable at March 31 are a result of March purchases of inventory.
f.) Monthly expenses are as follows: salaries and wages, 12% of sales; rent, $2500 per
month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses
are paid monthly. Depreciation is $900 per month (includes depreciation on new assets).
g.) Equipment costing $1 500 will be purchase in for cash in April.
h.) The company must maintain a minimum balance of$4 000. An open line of credit is
available at a local bank. All borrowing is done at the beginning of the month, and all
4
repayments are made at the end of a month; borrowing must be in multiple of $1 000.
The annual interest rate i s12%. Interest is paid only at the time of repayment of principal.
Required: Using the data above prepare:
1.) Schedule of expected cash collection
2.) Inventory purchase budget
3.) Schedule of expected cash disbursements – purchases
4.) Schedule of expected cash disbursements- Operating expenses
5.) The
6.) Income statement for the three months ended June 30.
7.) Balance Sheet as of the June 30 [
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