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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 quarter:
Required:
Schedule of Expected Cash Collections |
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|
January |
February |
March |
Quarter |
Cash sales |
$80,000 |
|
|
|
Credit sales |
$224,000 |
|
|
|
Total Collections |
$304,000 |
|
|
|
Using the data above, complete the following statements and schedules for the first quarter. Submit your responses in an Excel spreadsheet:
Merchandise Purchases Budget |
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|
January |
February |
March |
Quarter |
Budgeted Cost of Goods Sold |
$240,000* |
$360,000 |
|
|
Add desired ending inventory |
$90,000** |
|
|
|
Total needs |
$330,000 |
|
|
|
Less beginning inventory |
$60,000 |
|
|
|
Required purchases |
$270,000 |
|
|
|
*$400,000 sales x 60% cost ratio = $240,000 |
|
|
|
|
Schedule of Expected Cash Disbursements-Merchandise Purchases |
||||
|
January |
February |
March |
Quarter |
December purchases |
$93,000 |
|
|
$93,000 |
January purchases |
$135,000 |
$135,000 |
|
$270,000 |
February purchases |
|
|
|
|
March purchases |
|
|
|
|
Total disbursements |
$228,000 |
|
|
|
Schedule of Expected Cash Disbursements-Selling and Administrative Expenses |
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|
January |
February |
March |
Quarter |
Salaries and wages |
$27,000 |
|
|
|
Advertising |
$70,000 |
|
|
|
Shipping |
$20,000 |
|
|
|
Other expenses |
$12,000 |
|
|
|
Total disbursements |
$129,000 |
|
|
|
Cash Budget |
||||
|
January |
February |
March |
Quarter |
Cash balance, beginning |
$48,000 |
|
|
|
Add cash collections |
$304,000 |
|
|
|
Total cash available |
$352,000 |
|
|
|
Less cash disbursements |
|
|
|
|
For inventory |
$228,000 |
|
|
|
For selling and admin expenses |
$129,000 |
|
|
|
For purchase of equipment |
—— |
|
|
|
For cash dividends |
$45,000 |
|
|
|
Total cash disbursements |
$402,000 |
|
|
|
Excess (deficiency) of cash |
($50,000) |
|
|
|
Financing needed |
|
|
|
|
Cash balance, ending |
|
|
|
|
Provide your answers in a clearly organized Excel spreadsheet. Provide your answers in a clearly organized Excel spreadsheet
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