Homework SourseThis is what I have so far Need help with part E and F Devel
This is what I have so far. Need help with part E and F.
Developing a Master Budget for a Merchandising Organization
Dils Brother Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2017.
Dils Brother Department Store
Balance Sheet
March 31, 2017
Assets
Liabilities and Stockholders\' Equity
Cash
$ 4,000
Accounts payable
$31,000
Accounts receivable
31,000
Dividends payable
15,000
Inventory
36,000
Rent payable
3,000
Prepaid Insurance
3,000
Stockholders\' equity
50,000
Fixtures
25,000
Total assets
$99,000
Total liabilities and equity
$99,000
Actual and forecasted sales for selected months in 2017 are as follows:
Month
Sales Revenue
January
$ 70,000
February
60,000
March
50,000
April
60,000
May
70,000
June
80,000
July
100,000
August
90,000
Monthly operating expenses are as follows:
Wages and salaries
$ 27,000
Depreciation
100
Utilities
1,500
Rent
3,000
Cash dividends of $15,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month\'s cost of sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $4,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.
Part 1 - Presentation of Purchase Budget
Dils Brother Department Store
Purchase Budget
Quarter Ending June 30, 2017
$30000
($60000*50%)
$35000
($70000*50%)
$40000
($80000*50%)
$42000
($35000*120%)
$48000
($40000*120%)
$60000
($100000*50%*120%)
$36000
($60000*50%*120%)
Part 2 - Presentation of cash receipt schedule
Dils brother department store
Schedule of cash receipts
Quarter ending June 30, 2017
$30000
($60000*50%) of april month
$35000
($70000*50%) of may month
$40000
($80000*50%) of june month
$20000
($50000*40%) of march month
$24000
($60000*40%) of april month
$28000
($70000*40%) of may month
$6000
($60000*10%) of february monrh
$5000
($50000*10%) of March month
$6000
($60000*10%) of april month
Part 3 - Presentation of cash disbursement schedule
Dils brother department store
Schedule of cash disbursements
Quarter ending June 30, 2017
Part - Presentation of Cash Budget
Dils Brother department Store
Cash Budget
Quarter ending June 30, 2017
($1030)
($1000) + ($1000*12%*3/12)
(e) find an income statement for each month of the second quarter ending June 30, 2017.
Only use negative signs to show net losses for income.
Dils Brothers Department Store
Budgeted Monthly Income Statements
Quarter Ending June 30, 2017
April
May
June
Total
Sales
$Answer
$Answer
$Answer
$Answer
Cost of sales
Answer
Answer
Answer
Answer
Gross profit
Answer
Answer
Answer
Answer
Operating expenses:
Wages and salaries
Answer
Answer
Answer
Answer
Depreciation
Answer
Answer
Answer
Answer
Utilities
Answer
Answer
Answer
Answer
Rent
Answer
Answer
Answer
Answer
Insurance
Answer
Answer
Answer
Answer
Interest
Answer
Answer
Answer
Answer
Total expenses
Answer
Answer
Answer
Answer
Net income
$Answer
$Answer
$Answer
$Answer
(f) find a budgeted balance sheet as of June 30, 2017.
Dils Brothers Department Store
Budgeted Balance Sheet
June 30, 2017
Assets
Liabilities and Equity
Cash
$Answer
Merchandise payable
$Answer
Accounts receivable
Answer
Dividend payable
Answer
Inventory
Answer
Rent payable
Answer
Prepaid insurance
Answer
Loans payable
Answer
Fixtures
Answer
Interest payable
Answer
Total assets
$Answer
Stockholders\' equity
Answer
Total liab. & equity
$Answer
| Dils Brother Department Store | |||
|---|---|---|---|
| Assets | Liabilities and Stockholders\' Equity | ||
| Cash | $ 4,000 | Accounts payable | $31,000 |
| Accounts receivable | 31,000 | Dividends payable | 15,000 |
| Inventory | 36,000 | Rent payable | 3,000 |
| Prepaid Insurance | 3,000 | Stockholders\' equity | 50,000 |
| Fixtures | 25,000 | ||
| Total assets | $99,000 | Total liabilities and equity | $99,000 |
Solution
workings:
Prepaid insurance is balance after expensing insurance,
fixtures is after providing for depreciation of 300.
Loans payable balance= loan taken - repaid= 25000-1000=24000
| Dils Brothers Department Store | |||
| Budgeted Balance Sheet | |||
| June 30, 2017 | |||
| Assets | Liabilities and Equity | ||
| Cash | 4470 | Merchandise payable | 52000 |
| Accounts receivable | 47000 | Dividend payable | 15000 |
| Inventory | 60000 | Rent payable | 3000 |
| Prepaid insurance | 1200 | Loans payable | 24000 |
| Fixtures | 24700 | Interest payable | 0 |
| Total assets | 137370 | Stockholders\' equity | 43370 |
| Total liab. & equity | 137370 |
