Acct 505 Project A
Case 9-30
1. a. 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
b. Schedule of expected cash collections:
February sales (10%)... $ 26,000
$ 26,000
March sales
(70%, 10%) ............. 280,000 $ 40,000
320,000
April sales
(20%, 70%, 10%) .... 130,000
455,000 $ 65,000
650,000
May sales
(20%, 70%) .............
200,000 700,000
900,000
June sales (20%) .........
100,000
100,000
Total cash collections ... $436,000 $695,000 $865,000 $1,996,000
c. Merchandise purchases budget:
Budgeted unit sales ..... 65,000
Add desired ending inventory (40% of the next month’s unit sales)................. 40,000
Total needs.................. 105,000
Less beginning inventory .................. 26,000
Required purchases...... 79,000
Cost of purchases at
$4 per unit ................ $316,000
100,000
50,000
215,000
20,000
120,000
12,000
62,000
12,000
227,000
40,000
80,000
20,000
42,000
26,000
201,000
$320,000 $168,000 $ 804,000
d. Budgeted cash disbursements for merchandise purchases:
Accounts payable .......... $100,000
April purchases ............. 158,000
May purchases ..............
June purchases .............
Total cash payments ..... $258,000
$ 100,000
$158,000
316,000
160,000 $160,000
320,000
84,000
84,000
$318,000 $244,000 $ 820,000
Case 9-30 (continued)
2.
Earrings Unlimited
Cash Budget
For the Three Months Ending June 30
Cash balance.....................
Add collections from customers ......................
Total cash available............
Less disbursements:
Merchandise purchases ...
Advertising .....................
Rent ...............................
Salaries ..........................
Commissions (4% of sales) ..........................
Utilities ...........................
1. a. 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
b. Schedule of expected cash collections:
February sales (10%)... $ 26,000
$ 26,000
March sales
(70%, 10%) ............. 280,000 $ 40,000
320,000
April sales
(20%, 70%, 10%) .... 130,000
455,000 $ 65,000
650,000
May sales
(20%, 70%) .............
200,000 700,000
900,000
June sales (20%) .........
100,000
100,000
Total cash collections ... $436,000 $695,000 $865,000 $1,996,000
c. Merchandise purchases budget:
Budgeted unit sales ..... 65,000
Add desired ending inventory (40% of the next month’s unit sales)................. 40,000
Total needs.................. 105,000
Less beginning inventory .................. 26,000
Required purchases...... 79,000
Cost of purchases at
$4 per unit ................ $316,000
100,000
50,000
215,000
20,000
120,000
12,000
62,000
12,000
227,000
40,000
80,000
20,000
42,000
26,000
201,000
$320,000 $168,000 $ 804,000
d. Budgeted cash disbursements for merchandise purchases:
Accounts payable .......... $100,000
April purchases ............. 158,000
May purchases ..............
June purchases .............
Total cash payments ..... $258,000
$ 100,000
$158,000
316,000
160,000 $160,000
320,000
84,000
84,000
$318,000 $244,000 $ 820,000
Case 9-30 (continued)
2.
Earrings Unlimited
Cash Budget
For the Three Months Ending June 30
Cash balance.....................
Add collections from customers ......................
Total cash available............
Less disbursements:
Merchandise purchases ...
Advertising .....................
Rent ...............................
Salaries ..........................
Commissions (4% of sales) ..........................
Utilities ...........................