Acc505

736 WordsApr 19, 20123 Pages
Chapter 9 Case 9-30 Master Budget with Supporting Schedules You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program. To this end, you have worked with accounting and other areas to gather the information assembled below. The company sells many styles…show more content…
|21,000 | |Property and equipment (net)………………………………. |950,000 | |Total liabilities and stockholders’ equity……………… | | | |$1,495,000 | | | | |Liabilities and Stockholders’ Equity | |Accounts payable…………………………………………………… |$100,000 | |Dividends payable…………………………………………………. |15,000 | |Capital stock………………………………………………………….. |800,000 | |Retained earnings…………………………………………………. |580,000 | |Total liabilities and stockholders’ equity………………. | | | |$1,495,000 | The company maintains a minimum cash balance of $50,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month. The company has an agreement with a bank that allows the company 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

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