A listing of the MFH's ledger accounts as of March 31 is given below: Assets Cash...
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A listing of the MFH's ledger accounts as of March 31 is given below: Assets Cash Accounts receivable ($130,000 February sales; $1,600,000 March sales) Stock Prepaid insurance Property and equipment (net) Total Liabilities and Stockholders' Equity Accounts payable Dividends payable Share Capital Retained earnings Total Amount $ 370,000 1,730,000 520,000 105,000 4,750,000 $7,475,000 Amount $ 500,000 75,000 4,000,000 2,900,000 $7,475,000 MFH maintains a minimum cash balance of $250,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. MFH has an agreement with a bank that allows the MFH to borrow in increments of $5,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, MFH would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $5,000), while still retaining at least $250,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: 8. 1. A sales budget, by month and in total. 2. A schedule of expected cash collections from sales, by month and in total. 3. A purchases budget in units and in dollars. Show the budget by month and in total. 4. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 5. A Selling and Administrative Expenses Budget and show cash payments for S&A Expenses by month and in total. 6. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $250,000. 7. A pro forma income statement for the three-month period ending June 30. Use the contribution approach. A pro forma balance sheet as of June 30. A listing of the MFH's ledger accounts as of March 31 is given below: Assets Cash Accounts receivable ($130,000 February sales; $1,600,000 March sales) Stock Prepaid insurance Property and equipment (net) Total Liabilities and Stockholders' Equity Accounts payable Dividends payable Share Capital Retained earnings Total Amount $ 370,000 1,730,000 520,000 105,000 4,750,000 $7,475,000 Amount $ 500,000 75,000 4,000,000 2,900,000 $7,475,000 MFH maintains a minimum cash balance of $250,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. MFH has an agreement with a bank that allows the MFH to borrow in increments of $5,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, MFH would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $5,000), while still retaining at least $250,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: 8. 1. A sales budget, by month and in total. 2. A schedule of expected cash collections from sales, by month and in total. 3. A purchases budget in units and in dollars. Show the budget by month and in total. 4. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 5. A Selling and Administrative Expenses Budget and show cash payments for S&A Expenses by month and in total. 6. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $250,000. 7. A pro forma income statement for the three-month period ending June 30. Use the contribution approach. A pro forma balance sheet as of June 30.
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Here are the budgets and financial statements as required 1 Sales Budget April 1600000 May 1600000 J... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
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