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Problem 8-29 REV (Algo) Completing a Master Budget (LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10) The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 311 Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 8,000 $ 22,000 $ 42,600 $ 130, 800 $ 25,425 $ 150,000 $ 27,975 a. The gross margin is 25% of soles b. Actual and budgeted sales dato: March (actual) April May June July $ 55,000 $ 11,000 $ 76,000 $ 101,000 $ 52,000 C. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,800 per month other expenses (excluding depreciation), 6% Problem 8-29 REV (Algo) Completing a Master The following data relate to the operations of Shilow Compa Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $ 8,000 $ 22,000 $ 42,600 $ 130,800 $ 25,425 $ 150,000 $ 27,975 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 55,000 $ 71,000 $ 76,000 $ 101,000 $ 52,000 c. Sales are 60% for cash and 40% on credit. Credit sales are 31 are a result of March credit sales. d. Each month's ending inventory should equal 80% of the fol Help March (actual) April May Jane July $ 55,000 $ 71,000 $ 76,000 $ 101,000 $ 52,000 c. Sales are 60% for cash and 40% on credit Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's Inventory purchases is paid for in the month of purchase the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. 1. Monthly expenses are as follows: commissions, 12% of sales, rent, $2,800 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly Depreciation is $981 per month (includes depreciation on new assets) g. Equipment costing $2,000 will be purchased for cash in April h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that 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 preceding data: 1. Complete the schedule of expected cash collections 2. Complete the merchandise purchases budget and the schedule of expected cash disbursements for merchandise purchases. 3. Complete the cash budget. Complete this question by entering your answers in the tabs below. Pray Next 1 of 1 !!! agreement with a local bank that allows the company to total loan balance of $20,000. The interest rate on these compounded. The company would, as far as it is able, rep Required: Using the preceding data: 1. Complete the schedule of expected cash collections. 2. Complete the merchandise purchases budget and the sch 3. Complete the cash budget. Complete this question by entering your answers in the Required 1 Required 2 Required 3 Complete the schedule of expected cash collections. Schedule of Expected Cash Collections April May June Quarter Cash sales $ 42,600 Credit sales 22,000 Total collections $ 64,600 $ 0 $ 0 $ 0 he... W A Letter to Mother... VitalSource Books... omework 3 - Algorithmic Saved Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete the merchandise purchases budget and the schedule of expected cash disbursements 0 0 Merchandise Purchases Budget April May June Quarter Budgeted cost of goods sold $ 53,250 $57,000 Add desired ending merchandise inventory 45,600 Total needs 98,850 57.000 Less beginning merchandise inventory 42,600 Required purchases $ 56,250 $57,000 $ 0 $ 0 Budgeted cost of goods sold for April = $71,000 sales x 75% = $53,250. Add desired ending inventory for April - $57.000 x 80% - $45,600. Schedule of Expected Cash Disbursements Merchandise Purchases April May June Quarter March purchases $ 25,425 $ 25 425 April purchases 28,125 28,125 56.250 May purchases June purchases Total disbursements $ 53,550 $28,125 $ Os 81.675 Prey 1 of 1 Next MacBook Air Required 1 Required 2 Required 3 Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a Shilow Company Cash Budget April May $ 8,000 64,600 72,600 June Quarter 0 es 0 0 53,550 15,580 2,000 Beginning cash balance Add collections from customers Total cash available Less cash disbursements: For inventory For expenses For equipment Total cash disbursements Excess (deficiency) of cash available over disbursements Financing Borrowings Repayments Interest Total financing Ending cash balance 71,130 0 0 1.470 0 0 0 0 0 0 1,470 $ 0 0 $ s 0 $ 0