California Surfing Company California Surfing, a merchandiser for surf boards is beginning its sales operations on...
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California Surfing Company California Surfing, a merchandiser for surf boards is beginning its sales operations on January 1, 2019. The selling price for each board is $50. Expected sales, in units, are: January 500, February 600, March 700, April 800. 20% of customers purchase on credit, and they are given a credit of two months. The cost price of each board is $10. California Surfing has negotiated credit terms with its vendors for 30 days. The company wishes to maintain an ending inventory each month equaling 30% of next month's sales. The following are the expenditures per month: $2000 $500 $5000 90% selling, 10% general 60% selling 70% selling 50% selling Rent Utilities Salaries Depreciation $1000 Advertising $500 Commission $5 per board The company plans to prepay the rent for the entire first quarter in January. Salaries and Advertising are paid in the month in which they are incurred. All the other expenses are paid the following month, except commission, which is paid after 2 months. Dividends $ 500 are paid each month. The beginning cash balance for January is $50,000. California Surf Board wishes to maintain a cash balance of at least $5,000 each month and can borrow funds if necessary. Prepare the Master Budget for the 1st Quarter. Additionally, prepare the budgeted income statement and the CVP income statement for the 1st quarter. California Surfing Company California Surfing, a merchandiser for surf boards is beginning its sales operations on January 1, 2019. The selling price for each board is $50. Expected sales, in units, are: January 500, February 600, March 700, April 800. 20% of customers purchase on credit, and they are given a credit of two months. The cost price of each board is $10. California Surfing has negotiated credit terms with its vendors for 30 days. The company wishes to maintain an ending inventory each month equaling 30% of next month's sales. The following are the expenditures per month: $2000 $500 $5000 90% selling, 10% general 60% selling 70% selling 50% selling Rent Utilities Salaries Depreciation $1000 Advertising $500 Commission $5 per board The company plans to prepay the rent for the entire first quarter in January. Salaries and Advertising are paid in the month in which they are incurred. All the other expenses are paid the following month, except commission, which is paid after 2 months. Dividends $ 500 are paid each month. The beginning cash balance for January is $50,000. California Surf Board wishes to maintain a cash balance of at least $5,000 each month and can borrow funds if necessary. Prepare the Master Budget for the 1st Quarter. Additionally, prepare the budgeted income statement and the CVP income statement for the 1st quarter.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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