$EX9-29(Algo)$ Budgeted Financial Statements; Retailer $(LO9-3,9-5)$

Eastside Hardware $is$ a retail hardware store. Information about the store$s$ operations follows.

November $20x1$ sales amounted $to$ $$580,000.$

Sales are budgeted $at$ $$620,000$ for December $20x1$ and $$580,000$ for January $20x2.$

Collections are expected $tobe60$ percent $in$ the month $of$ sale and $38$ percent $in$ the month following the sale. Two percent $of$ sales are expected $tobe$ uncollectible. Bad debts expense $is$ recognized monthly.

The store$s$ gross margin $is20$ percent $of$ its sales revenue.

A total $of80$ percent $of$ the merchandise for resale $is$ purchased $in$ the month prior $to$ the month $of$ sale, and $20$ percent $is$ purchased $in$ the month $of$ sale. Payment for merchandise $is$ made $in$ the month following the purchase.

Other monthly expenses paid $in$ cash amount $to$ $$47,000.$

Annual depreciation $is$ $$486,000.$

The company$s$ balance sheet $asof$ November $30,20x1,isas$ follows:

EASTSIDE HARDWARE, Incorporated Balance Sheet November $30,20x1$AssetsCash$ $62,000$Accounts receivable $(netof$ $$8,800$ allowance for uncollectible accounts$)170,000$Inventory$460,000$Property, plant, and equipment $(netof$ $$1,360,000$ accumulated depreciation$)1,904,000$Total assets$ $2,596,000$Liabilities and Stockholders$$ EquityAccounts payable$ $489,600$Common stock$1,770,000$Retained earnings$336,400$Total liabilities and owner$s$ equity$ $2,596,000$

Required:

Compute the budgeted cash collections for December $20x1.$

Compute the budgeted income $(loss)$ before income taxes for December $20x1.$

Compute the projected balance $in$ accounts payable $on$ December $31,20x1.$

$EX9-29(Algo)$ Budgeted Financial Statements; Retailer $(LO9-3,9-5)$

Eastside Hardware $is$ a retail hardware store. Information about the store's operations follows.

November $20x1$ sales amounted $to$ $$580,000.$

Sales are budgeted $at$ $$620,000$ for December $20x1$ and $$580,000$ for January $20x2.$

Collections are expected $tobe60$ percent $in$ the month $of$ sale and $38$ percent $in$ the month following the sale. Two percent $of$ sales

are expected $tobe$ uncollectible. Bad debts expense $is$ recognized monthly.

The store's gross margin $is20$ percent $of$ its sales revenue.

A total $of80$ percent $of$ the merchandise for resale $is$ purchased $in$ the month prior $to$ the month $of$ sale, and $20$ percent $is$

purchased $in$ the month $of$ sale. Payment for merchandise $is$ made $in$ the month following the purchase.

Other monthly expenses paid $in$ cash amount $to$ $$47,000.$

Annual depreciation $is$ $$486,000.$

The company's balance sheet $asof$ November $30,20x1,isas$ follows:

Required:

Compute the budgeted cash collections for December $20x1.$

Compute the budgeted income $(loss)$ before income taxes for December $20x1.$

Compute the projected balance $in$ accounts payable $on$ December $31,201.$

Complete this question $by$ entering your answers $in$ the $tabs$ below.

Compute the projected balance $in$ accounts payable $on$ December $31,20x1.$

Accounts payable Complete this question $by$ entering your answers $in$ the $tabs$ below.

Required $1$

Required $2$

Required $3$

Compute the budgeted income $(loss)$ before income taxes for December $20x1.$

Budgeted

income

before taxes