acct-505 project a project a case 9-30.pdf

7/21/2019 ACCT-505 Project A Project A Case 9-30.pdf

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PROJECT A—Case 9-30

Student Name: Your Name Here

SALES BUDGET: April May June Quarter Budgeted unit sales 65,000 100,000 50,000 215,000 Selling price per unit 10$ 10$ 10$ 10$Total sales 650,000$ 1,000,000$ 500,000$ 2,150,000$

SCHEDULE OF EXPECTED CASH COLLECTIONS: 10$ April May June Quarter

February sales 26,000$ 26,000$March sales 280,000$ 40,000$ 320,000$

April sales 130,000$ 455,000$ 65,000$ 650,000$May sales 200,000$ 700,000$ 900,000$

June sales 100,000$ 100,000$Total cash collections 436,000$ 695,000$ 865,000$ 1,996,000$

MERCHANDISE PURCHASES BUDGET:

April May June Quarter Budgeted unit sales 65,000 100,000 50,000 215,000

Add desired ending inventory* 40,000 20,000 12,000 12,000Total needs 105,000 120,000 62,000 227,000Less beginning inventory 26,000 40,000 20,000 26,000Required purchases 79,000 80,000 42,000 201,000Cost of purchases @ $4 per unit 316,000$ 320,000$ 168,000$ 804,000$

*40% of next month's sales in units

BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:

April May June Quarter Accounts payable 100,000$ 100,000$ April purchases 158,000$ 158,000$ 316,000$May purchases 160,000$ 160,000$ 320,000$June purchases 84,000$ 84,000$Total cash payments 258,000$ 318,000$ 244,000$ 820,000$

EARRINGS UNLIMITED

CASH BUDGET

FOR THE 3 MONTHS ENDING JUNE 30 April May June Quarter

Cash balance 74,000$ 50,000$ 50,000$ 74,000$ Add collections from customers 436,000$ 695,000$ 865,000$ 1,996,000$Total cash available 510,000$ 745,000$ 915,000$ 2,070,000$

Less disbursements Merchandise purchases 258,000$ 318,000$ 244,000$ 820,000$ Advertising 200,000$ 200,000$ 200,000$ 600,000$



Rent 18,000$ 18,000$ 18,000$ 54,000$Salaries 106,000$ 106,000$ 106,000$ 318,000$Commissions 26,000$ 40,000$ 20,000$ 86,000$Utilities 7,000$ 7,000$ 7,000$ 21,000$Equipment purchases -$ 16,000$ 40,000$ 56,000$Dividends paid 15,000$ -$ -$ 15,000$

Total disbursements 630,000$ 705,000$ 635,000$ 1,970,000$

Excess (deficiency) of receipts over disbursements (120,000)$ 40,000$ 280,000$ 100,000$Financing: Borrowings 170,000$ 10,000$ 180,000$

Repayments (180,000)$ (180,000)$Interest (5,300)$ (5,300)$

Total financing 170,000$ 10,000$ (185,300)$ (5,300)$

Cash balance, ending 50,000$ 50,000$ 94,700$ 94,700$

EARRINGS UNLIMITEDBUDGETED INCOME STATEMENT

FOR THE 3 MONTHS ENDED JUNE 30

Sales 2,150,000$Variable expenses: Cost of goods sold 860,000$

Commissions 86,000$ 946,000$Contribution Margin 1,204,000$Fixed expenses: Advertising 600,000$

Rent 54,000$

Salaries 318,000$Utilities 21,000$Insurance 9,000$Depreciation 42,000$ 1,044,000$

Net operating income 160,000$Interest expense 5,300$Net income 154,700$

EARRINGS UNLIMITED

BUDGETED BALANCE SHEET

JUNE 30

Assets:

Cash 94,700$ Accounts receivable (see below) 500,000$Inventory 48,000$Prepaid insurance 12,000$Property and equipment, net 964,000$

Total assets 1,618,700$



Liabilities and Stockholders' Equity

Accounts payable, purchases 84,000$Dividends payable 15,000$Capital stock 800,000$

Retained earnings (see below) 719,700$Total liabilities and stockholders' equity 1,618,700$

Working Data

Accounts receivable at June 30:

May sales x 10% 10% 100,000$June sales x 80% 80% 400,000$Total 500,000$

Retained earnings at June 30:

Balance, March 31 580,000$

Add net income 154,700$Total 734,700$Less dividends declared 15,000$Balance, June 30 719,700$



Sales Collection %26,000 1st month 20%40,000 2nd month 70%65,000 3rd month 10%

100,000

50,000

100,000Sales 50,000

March 65,000July 30,000

Starting Inv 40%

PaymentPer Month 50%

50%50%



4% Commission Rate

Interest Calculations10,000$ 1% 2 200$

170,000$ 1% 3 5,100$5,300$

215,000 4$

Cost per month Months3,000$ 3 9,000$

14,000$ 3 42,000$

12,000 4.00$21,000$ 9,000$

950,000$ 42,000$ 56,000$

acct-505 project a project a case 9-30.pdf

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