Hillyard Company, an office supplies specialty store, gathered the following Information to prepare its master budget...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Hillyard Company, an office supplies specialty store, gathered the following Information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings Debits Credits $ 64,000 219,200 61,350 374,000 $ 92,325 500,000 126,225 $ 718,550 $ 718,550 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January $ 274,000 $ 409,000 $ 606,000 $ 321,000 February March April $ 217,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $39,000 per month; advertising, $57,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, Including depreciation on new assets acquired during the quarter, will be $45,940 for the quarter. f. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's Inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $3,400 cash. During March, other equipment will be purchased for cash at a cost of $82,000. 1. During January, the company will declare and pay $45,000 in cash dividends. J. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank allowing it to borrow in Increments of $1,000 at the beginning of each month. The Interest rate on these loans Is 1% per month, and for simplicity, we will assume Interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated Interest at the end of the quarter. Required: Using the data above, complete the following statements and schedules for the first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31. Hillyard Company, an office supplies specialty store, gathered the following Information to prepare its master budget for the first quarter of the year: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings Debits Credits $ 64,000 219,200 61,350 374,000 $ 92,325 500,000 126,225 $ 718,550 $ 718,550 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January $ 274,000 $ 409,000 $ 606,000 $ 321,000 February March April $ 217,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $39,000 per month; advertising, $57,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, Including depreciation on new assets acquired during the quarter, will be $45,940 for the quarter. f. Each month's ending Inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's Inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $3,400 cash. During March, other equipment will be purchased for cash at a cost of $82,000. 1. During January, the company will declare and pay $45,000 in cash dividends. J. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank allowing it to borrow in Increments of $1,000 at the beginning of each month. The Interest rate on these loans Is 1% per month, and for simplicity, we will assume Interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated Interest at the end of the quarter. Required: Using the data above, complete the following statements and schedules for the first quarter: 1. Schedule of expected cash collections: 2-a. Merchandise purchases budget: 2-b. Schedule of expected cash disbursements for merchandise purchases: 3. Cash budget: 4. Prepare an absorption costing Income statement for the quarter ending March 31. 5. Prepare a balance sheet as of March 31.
Expert 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
-
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first...
-
As an employee of Starbucks company, how would you personally interpret the code of ethics? How might the code influence your behavior within the workplace? Give several examples.
-
The article Mutational Landscape Determines Sensitivity to PD-1 Blockade in Non-Small Cell Lung Cancer (Science, 3 April 2015) described a study of 16 cancer patients taking the drug Keytruda. For...
-
Consider the variation functions (1 = (( + bg and (2 = ( + cg, where f and g in (1 are the same functions as ( and g in (2, and a, b, and c are parameters whose values are chosen to minimize the...
-
In Exercises 103110, insert either , or = in the shaded area to make a true statement. 315 |-0.6|
-
The enzyme lipase catalyzes the hydrolysis of esters of fatty acids. The hydrolysis of p-nitrophenyloctanoate was followed by measuring the appearance of p-nitrophenol in the reaction mixture: The...
-
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. A popular pastime among older Chinese men is to take their pet birds on daily...
-
Figure shows the spring-mass damper system of two degree of freedom with free vibrations. If m = m, m = 2.5m, c =C2=C3 = 2c, k = k, k = 2.5k and k3 = 3k. a) Draw the free body diagram & derive the...
-
The Dulac Box plant produces wooden packing boxes to be used in the local seafood industry. Current operations allow the company to make 700 boxes per day, in two 8-hour shifts (350 boxes per shift)....
-
How do I calculate loss carryforward deduction in a partnership?
-
WI has the following capital components and costs. Component Value After-tax Cost Debt 15,500 10% Preferred Stock 7,500 12% Common Equity 10,000 17% What is Wannalancit's weighted average cost of...
-
Bernie Madoff is well-known for being the orchestrator of the largest Ponzi scheme yet. His fraudulent machination crossed continents and was only able to be felled by something larger than his...
-
Set up the equations for the n-parameter Ritz approximation of the following equations associated with a simply supported beam and subjected to a uniform transverse load q = 40: dx dx =q for 0
-
In what manner does the media depict and represent the societal fabric within which it operates?
-
Write a paper about Information security governance & the risk management
-
What does non-recourse financing mean?
-
You are managing the development of a case tracking system project for your large law firm. The requirements phase of the project is almost complete, and preliminary design work has begun. The...
-
At the conclusion of this chapter, the textbook mentions that data and process modeling may eventually become obsolete due to the increasing popularity and usage of object-oriented modeling and...
-
Although data and process models depict the same system with different views, systemi designers must synchronize these different views to make sure that their models are consistent and complete. One...
Study smarter with the SolutionInn App