Gardner Corporation prepares its master budget on a quarterly basis. The following data have been assembled...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Gardner Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the first quarter of 2019: a. As of December 31, 2018 (the end of the prior quarter), the company's general ledger showed the following account balances: Credits Cash Accounts Receivable Inventory Plant and Equip (net) Accounts Payable Short-term Notes Payable Capital Stock Retained earnings Debits $15,000 March, 2019 April, 2019 40,000 35,000 110,000 $200,000 $25,000 30,000 114,000 31,000 $200,000 b. Actual sales for December and budgeted sales for the next four months are as follows: $140,000 December, 2018 January, 2019 February, 2019 190,000 230,000 120,000 100,000 c. Sales are 35 percent for cash and the rest on account. All sales on account are collected the month following sale. The accounts receivable at December 31 are a result of December credit sales. The company's gross profit rate is 45 percent of sales. e. Monthly expenses are budgeted as follows: salaries and wages, $16,000 per month; property taxes, $8,000 per month; rent, $15,000 per month; utilities, 3 percent of sales; depreciation, $12,000 per month; other expense, 5 percent of sales f. At the end of each month, inventory is to be on hand equal to 40 percent of the following month's sales needs, stated at cost. g. Fifty-five percent of a month's inventory purchases is paid for in the month of purchase; the rest is paid for in the following month. h. The company will purchase a new computer for $12,000 cash in January, a new copier for $20,000 cash in February, and other equipment for $8,000 cash in March. i. The company will declare and pay $10,000 in cash dividends per month. j. The company must maintain a minimum cash balance of $15,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid at the end of each month. The interest rate is 12 percent per annum. (Figure interest on whole months, e.g., 1/12, 2/12.) Required: Prepare a budgeting spreadsheet that is interactive. It should automatically update when changes are made to the input data, such as changes in sales forecast, equipment purchases, etc. Spreadsheets Hints 1. Create a worksheet for inputs that includes all potential variables that can be changed. Label the worksheet tab as "inputs." 2. Create a worksheet for each of the different budgets. Label the tabs appropriately. The following budgets should be included: Sales Budget a. b. Inventory Purchases Budget c. d. Selling and Administrative Budget Cash Collections from Customers Schedule Cash Paid for Inventory Purchases Schedule e. f. Cash Budget g. Budgeted Income Statement h. Budgeted Balance Sheet 3. Each budget should: a. be on a separate worksheet b. have a heading centered over the rest of the budget that includes the following: i. Name of Company ii. Name of Budget iii. Date: "March 31, 2019" or "For the Quarter ended March 31, 2019" c. be prepared on the monthly basis with a total column for the quarter. The budgeted income statement and budgeted balance sheet should be on the quarter basis (not monthly). 4. All worksheets should be interactive (i.e. all worksheet pages except the Input worksheet, should be formula driven). 5. We will use the following to grade the project: a. You will lose 10 points if you do not have separate worksheets for each budget. b. You will lose 15 points if the project is late. c. You will lose up to 20 points if your worksheets are not interactive. d. You will lose up to 20 points on layout. e. You will lose 15 points for not doing a cash budget. f. You will lose 15 points for not doing a budgeted income statement. g. You will lose 15 points for not balancing your budgeted balance sheet. h. You will lose points based on accuracy also. Gardner Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the first quarter of 2019: a. As of December 31, 2018 (the end of the prior quarter), the company's general ledger showed the following account balances: Credits Cash Accounts Receivable Inventory Plant and Equip (net) Accounts Payable Short-term Notes Payable Capital Stock Retained earnings Debits $15,000 March, 2019 April, 2019 40,000 35,000 110,000 $200,000 $25,000 30,000 114,000 31,000 $200,000 b. Actual sales for December and budgeted sales for the next four months are as follows: $140,000 December, 2018 January, 2019 February, 2019 190,000 230,000 120,000 100,000 c. Sales are 35 percent for cash and the rest on account. All sales on account are collected the month following sale. The accounts receivable at December 31 are a result of December credit sales. The company's gross profit rate is 45 percent of sales. e. Monthly expenses are budgeted as follows: salaries and wages, $16,000 per month; property taxes, $8,000 per month; rent, $15,000 per month; utilities, 3 percent of sales; depreciation, $12,000 per month; other expense, 5 percent of sales f. At the end of each month, inventory is to be on hand equal to 40 percent of the following month's sales needs, stated at cost. g. Fifty-five percent of a month's inventory purchases is paid for in the month of purchase; the rest is paid for in the following month. h. The company will purchase a new computer for $12,000 cash in January, a new copier for $20,000 cash in February, and other equipment for $8,000 cash in March. i. The company will declare and pay $10,000 in cash dividends per month. j. The company must maintain a minimum cash balance of $15,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid at the end of each month. The interest rate is 12 percent per annum. (Figure interest on whole months, e.g., 1/12, 2/12.) Required: Prepare a budgeting spreadsheet that is interactive. It should automatically update when changes are made to the input data, such as changes in sales forecast, equipment purchases, etc. Spreadsheets Hints 1. Create a worksheet for inputs that includes all potential variables that can be changed. Label the worksheet tab as "inputs." 2. Create a worksheet for each of the different budgets. Label the tabs appropriately. The following budgets should be included: Sales Budget a. b. Inventory Purchases Budget c. d. Selling and Administrative Budget Cash Collections from Customers Schedule Cash Paid for Inventory Purchases Schedule e. f. Cash Budget g. Budgeted Income Statement h. Budgeted Balance Sheet 3. Each budget should: a. be on a separate worksheet b. have a heading centered over the rest of the budget that includes the following: i. Name of Company ii. Name of Budget iii. Date: "March 31, 2019" or "For the Quarter ended March 31, 2019" c. be prepared on the monthly basis with a total column for the quarter. The budgeted income statement and budgeted balance sheet should be on the quarter basis (not monthly). 4. All worksheets should be interactive (i.e. all worksheet pages except the Input worksheet, should be formula driven). 5. We will use the following to grade the project: a. You will lose 10 points if you do not have separate worksheets for each budget. b. You will lose 15 points if the project is late. c. You will lose up to 20 points if your worksheets are not interactive. d. You will lose up to 20 points on layout. e. You will lose 15 points for not doing a cash budget. f. You will lose 15 points for not doing a budgeted income statement. g. You will lose 15 points for not balancing your budgeted balance sheet. h. You will lose points based on accuracy also.
Expert Answer:
Answer rating: 100% (QA)
a December 2018 Balances Cash Acoounts Receivable Inventory Plant and Equipment net Accounts Payable ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Chris Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in the preparation of the master budget for the second quarter of 2019: Actual...
-
The following data have been collected by an accountant who is performing an audit of paper products at a large office supply company. The dependent variable, y , is the time taken (in minutes) by...
-
The following data have been reported by Shen and Smith for benzene (Bz) adsorption on silica gel [16]: a) Do these data better fit a single site or a dual site Langmuir isotherm? Why? b) Assuming...
-
If Y (p) is the laplace transform of y(t), which is the solution of the initial value problem { + y(t) = - dt p+1 1+p sin t satisfying y (0) = 1 and y'(0)=0, then the Y(p) equals P -2p + 1+p (1+p) ...
-
How should a public accountant disclose misleading statements detected during a compilation engagement?
-
Who is likely to be more vocal when lobbying government to impose trade restrictions: producers or consumers? Explain your answer.
-
What are the different types of consulting and litigation support activities for fraud and forensic accounting professionals?
-
Spitfire Company was incorporated on January 2, 2013, but was unable to begin manufacturing activities until July 1, 2013, because new factory facilities were not completed until that date.The Land...
-
Defining the database management system and identifying the differences between a database and a database management system (DBMS) or relational database management system (RDBMS). Please provide the...
-
On May 31, O'Hearn Limited had a cash balance per books of $13,400. The bank statement from Community Bank on that date showed a balance of $15,230. A comparison of the bank statement with the...
-
What am I missing?@expert This is the complete list of T accounts given in thequestion. J. Kamas and G. Charrier have been operating a catering business for several years. In March, the partners plan...
-
Dave Collins and Christie Collins have two children, Ron, age 10, and Biki, age 21. The medical expenses and net income for each member of the family for 2021 is as follows: Medical expensesNet...
-
Following your review of the financials, the club would like you to take a deeper dive into the day-to-day operations. To drive the most impact in your limited time with the club, which line item of...
-
Problem 1: Tax Planning Variables Provide a 1-2 sentence explanation of each of the 4 tax planning variables in your own words (i.e., don't simply copy the notes or textbook). Problem 2. Individual...
-
After viewing the video Hacking the Supply Chain , apply some of the concepts Pete Russell describes regarding merchandise planning as they relate to a specific retailer that you have recently...
-
Cash flow from investing activities Additions to property and plant (100.0) Purchases of short-term investments (100.0) Sale of short-term investments 150.0 What should be the adjusted cash flow from...
-
A hospital has an unimproved lot a few miles from the hospital itself on which it is considering building a health clinic. Two years ago the board had a feasibility study done for $250,000 that...
-
If a process has a six-sigma capability, what is the process capability index? a. 1 b. 2 c. 6 d. 12
-
Wendell's Donut Shoppe is investigating the purchase of a new $18,600 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings...
-
If the Accounts Receivable balance increases during a period, how will this increase be recognized using the indirect method of computing the net cash provided by operating activities?
-
Refer to the financial statements for Castile Products, Inc., in Exercise 158. In addition to the data in these statements, assume that Castile Products, Inc., paid dividends of $2.10 per share...
-
A gene is a segment of DNA that contains the information to produce a functional product. The functional product of most genes is a. DNA. b. mRNA. c. a polypeptide. d. none of the above.
-
Which of the following is not a constituent of a cells proteome? a. An enzyme b. A cytoskeletal protein c. A transport protein in the plasma membrane d. An mRNA
-
The function of the genetic code is to a. promote transcription. b. specify the amino acids within a polypeptide. c. alter the sequence of DNA. d. do none of the above.
Study smarter with the SolutionInn App