Crowne store has the following sales revenue data available on April 1.

Feb $299,000 (actual)

Mar $286,000 (actual)

April $312,000 (budgeted)

May $286,000 (budgeted)

June $299,000 (budgeted)

July $312,000 (budgeted)

Aug $338,000 (budgeted)

Store sells 60% on the account and the remaining on cash. The collection pattern of the receivable are as follows:

60% collected in the month of sale

30% collected in the following month

9% collected in the second month following the sale

1% uncollectible bad debt

All items are sold at a price of $10 per unit. Inventory levels in units at the end of each month should be equal to the next month sales needs. Units cost around 65% of sales price. All purchases of inventory in a month are paid in the following month. Other expenses are budgeted as follows:

FIXED $65,000 per month, which includes $15,600 of depreciation

Variable 10% of sales revenue

All these expenses are paid in the month incurred.

The balance sheet accounts’ balance on 3/31 are as follows:

Cash $104,000

Accounts receivable (net of uncollectible) $138,450

Inventory $295,750

Fixed assets (net of accumulated depreciation) $390,000

Accounts payable (from inventory purchase) $194,350

Common stock $260,000

Retained earnings $473,850

Company budgets to pay $80,000 of dividend on 6/30.

REQUIRED:

A schedule of cash collection for each month of quarter 2

1. A schedule of inventory purchases for each month of quarter 2
2. A schedule of cash payments for each month of quarter 2.
3. A cash budget for each month of quarter 2.
4. Budgeted income statement for the period ending quarter 2
5. Balance sheet as of June 30.

Answer rating: 100% (QA)

Sales Budget April 312000 124800 187200 ay 286000 June Quarter Budgeted sales Cash sales 299000 1196... View the full answer