The LaGrange Corporation had the following budgeted sales for the first half of the current year:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The LaGrange Corporation had the following budgeted sales for the first half of the current year: January February March April May June Cash Sales Credit Sales $ 30,000 $ 130,000 $ 35,000 $ 150,000 $ 38,000 $ 110,000 $ 33,000 $ 118,000 $ 43,000 $ 180,000 $ 60,000 $ 120,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 50% in month of sale 30% in month following sale 20% in second month following sale The accounts receivable balance on January 1 of the current year was $76,000, of which $58,000 represents uncollected December sales and $18,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31? Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Assessment Tool iFrame Assets Cash Balance Sheet April 30 $ 10,300 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings 70,000 43,000 227,000 $ 350,300 $ 86,000 23,000 180,000 61,300 Total liabilities and stockholders' equity $ 350,300 The company is in the process of preparing a budget for May and assembled the following data: a. Sales are budgeted at $276,000 for May. Of these sales, $82,800 will be for cash; the remainder will be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder are collected in the following month. All of the April 30 accounts receivable will be collected in May. b. Purchases of inventory are expected to total $147,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $43,000. d. Selling and administrative expenses for May are budgeted at $97,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,200 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $235 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $12,100 will be purchased for cash during May. g. During May, the company will borrow $29,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: For May: 1. Calculate the expected cash collections from customers. 2. Calculate the expected cash disbursements for merchandise purchases. 3. Prepare a cash budget. 4. Prepare a budgeted income statement. 5. Prepare an end-of-month budgeted balance sheet. 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: Debits Credits $ Cash 52,000 Accounts receivable 209,600 Inventory 59,550 Buildings and equipment 362,000 (net) Accounts payable 88,725 Common stock 500,000 Retained earnings 94,425 $ 683,150 683,150 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) 262,000 $ $ January 397,000 $ February 594,000 $ March 308,000 $ April 205,000 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 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 $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. 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. The LaGrange Corporation had the following budgeted sales for the first half of the current year: January February March April May June Cash Sales Credit Sales $ 30,000 $ 130,000 $ 35,000 $ 150,000 $ 38,000 $ 110,000 $ 33,000 $ 118,000 $ 43,000 $ 180,000 $ 60,000 $ 120,000 The company is in the process of preparing a cash budget and must determine the expected cash collections by month. To this end, the following information has been assembled: Collections on sales: 50% in month of sale 30% in month following sale 20% in second month following sale The accounts receivable balance on January 1 of the current year was $76,000, of which $58,000 represents uncollected December sales and $18,000 represents uncollected November sales. What is the budgeted accounts receivable balance on May 31? Minden Company is a wholesale distributor of premium European chocolates. The company's balance sheet as of April 30 is given below: Assessment Tool iFrame Assets Cash Balance Sheet April 30 $ 10,300 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Common stock Retained earnings 70,000 43,000 227,000 $ 350,300 $ 86,000 23,000 180,000 61,300 Total liabilities and stockholders' equity $ 350,300 The company is in the process of preparing a budget for May and assembled the following data: a. Sales are budgeted at $276,000 for May. Of these sales, $82,800 will be for cash; the remainder will be credit sales. One-half of a month's credit sales are collected in the month the sales are made, and the remainder are collected in the following month. All of the April 30 accounts receivable will be collected in May. b. Purchases of inventory are expected to total $147,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May. c. The May 31 inventory balance is budgeted at $43,000. d. Selling and administrative expenses for May are budgeted at $97,500, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,200 for the month. e. The note payable on the April 30 balance sheet will be paid during May, with $235 in interest. (All of the interest relates to May.) f. New refrigerating equipment costing $12,100 will be purchased for cash during May. g. During May, the company will borrow $29,200 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year. Required: For May: 1. Calculate the expected cash collections from customers. 2. Calculate the expected cash disbursements for merchandise purchases. 3. Prepare a cash budget. 4. Prepare a budgeted income statement. 5. Prepare an end-of-month budgeted balance sheet. 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: Debits Credits $ Cash 52,000 Accounts receivable 209,600 Inventory 59,550 Buildings and equipment 362,000 (net) Accounts payable 88,725 Common stock 500,000 Retained earnings 94,425 $ 683,150 683,150 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) 262,000 $ $ January 397,000 $ February 594,000 $ March 308,000 $ April 205,000 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, $27,000 per month; advertising, $67,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $44,020 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 $2,200 cash. During March, other equipment will be purchased for cash at a cost of $76,000. i. 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
Management Accounting
ISBN: 9780077185534
6th Edition
Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
Posted Date:
Students also viewed these accounting questions
-
Required: Complete the following table by computing the missing amounts for the following independent cases. (Do not round intermediate calculations. Round "Annual Interest Rate" to 1 decimal place.)...
-
Bisky Bites Corporation is a biscuit-making company and manufactures chocolate-flavoured biscuits. A senior accountant is responsible for formulating the master budget of the company. The company...
-
?Claim: A of adults would erase all of their personalinformation online if they could. A software firm survey of 511randomly selected adults showed that 36 ?% of them would erase allof their pe...
-
Repeat Problem 32 with the change that each obligation accrues interest at the rate of 9% compounded monthly from a date nine months ago when the obligations were incurred.
-
Senator Borman interjects the following comment after the statements by Senators Creighton and Long reported in Problems 2-8 and 2-9: "In fact, both of my esteemed colleagues are wrong, because an...
-
Convert the following information into: a) a semantic net b) a frame-based representation A Ford is a type of car. Bob owns two cars. Bob parks his car at home.His house is in California, which is a...
-
S. Pagan and T. Tabor share income on a 6:4 basis. They have capital balances of $100,000 and $60,000, respectively, when W. Wolford is admitted to the partnership. Instructions Prepare the journal...
-
Discuss the factors that favor personal selling rather than advertising. ?
-
Assume perfect capital markets. First Firm is considering making an investment of $183 today. If it did so, the one-year investment would pay out $241 in 12 months. First Firm will fund part of the...
-
3) Fourier Series Representation of a Periodic Discrete Time Signal [25 pts] Consider the following discrete time signal periodic with N 4 x[n] 1 + sin n+3 cos n + cos -n+ Find the Fourier series...
-
Match the following terms with their definitions (not every letter is used) 1. 2. 3. 4. 5. Outstanding stock Paid-in Capital Authorized stock Treasury stock Issued stock a. The earnings not paid out...
-
Why leadership studies are important for organizational development? 2. Please explain Transformational Leadership and Transactional Leadership? What are the differences between Transformational...
-
Consider the following function on the given domain P(x) = (x-2)41,x 2 Find the domain of the inverse function, P-1 (x). Express your answer as an inequality.
-
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 52,800 machine hours per year, which represents...
-
Richard Masons ethical framework for information technology is well known for the acronym PAPA which stands for PRIVACY, ACCESSIBILITY, PROPERTY, and ACCURACY. In a paper analyze these four areas of...
-
What are the four types of poultry production systems? Explain each type.
-
Using the demand and cost curves of an individual firm in oligopoly, demonstrate the effects of each of the following: a. The Clean Air Act b. The Nutrition and Labeling Act c. A ban on smoking...
-
Which of the three types of government policiesantitrust, social regulation, and economic regulationis the basis for each of the following? a. Beautician education standards b. Certified Public...
-
Explain why a market in which broadcast licenses can be purchased might be more efficient than having the FCC assign licenses on some basis designed by the FCC.
Study smarter with the SolutionInn App