The following data relate to the operations of HASF Company a wholesale distributor of consumer goods Current
Question:
The following data relate to the operations of HASF Company a wholesale distributor of consumer goods Current assets as of March 31
Cash 48,000
A/c receivable 224,000
Inventory 60,000
Building and equipment net 370,000
A/c payable 93,000
Capital stock 500,000
Retained earnings 109,000
1). Gross profit is 40% of sales
2). Actual and budgeted sales data
March 280,000
April 400,000
May 600,000
June 300,000
July 200,000
3). sales are 20% for cash and 80% on credit. Credit sales are collected in the month following sales
4). Each month ending inventory should equal to 25% of following month cost of goods sold
5). one half of a month ‘s inventory purchase is paid for in the month of purchase, other half is paid for in the month.
6). Monthly expense are follows
- Salaries and wages 27,000
- Advertising exp 70,000 per month
- Shipping , 5% of sales
- Depreciation 42,000 per quarter
Note these expenses are paid monthly
7). Equipment costing 1,700 will be purchase for cash in May, During June other equipment will be purchase for cash at cost 84,500
8). Management would like to maintain a minimum cash balance of at least 30,000 at the end of each month
9). the company has an agreement with a local bank that allows the company to borrow in the increments of 1,000 at the beginning of each month up to a total loan balance of 20,000. The interest rate on these loan is 1`% per month
10). During April company declare and pay 45, in cash dividends
Required
- Income statement balance sheet
- Using the preceding data compute, the following for April May June and total
- Schedule of expected cash collection
- Merchandise purchase budget
- Schedule of expected cash disbursements Merchandise purchase
- Schedule of expected cash disbursements for selling and administrative expense
- Cash budget
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello