BARRY'S SUPERSTOREBARRY'S SUPERSTOREComparative Year-End Income StatementsComparative Year-End Balance SheetsPrior YearCurrent YearPrior Year Current YearAssets:CashNet Sales$100,000$120,000Cost of Goods Sold50.00060,000$90,000$110,000Gross Profit50,00060,000Accounts Receivable20,00030,00035,00015,000160,00040,000$200.000Inventory40,0005,00020,000200.00050,000$250.000Rent ExpenseDepreciation Expense5,500Short-Term Investments2.5003,600Total Current AsstesSalaries ExpenseUtlity Expense3,0005,400EquipmentTotal Assets1.5002,500Operating Income38,00043,000Liabilities:$ 75.00025.000100,000Accounts Payable$ 60.000Interest Expense3,0002,000Unearned Revenue10.000Income Tax Expense70,0005.000$ 30,0006,000Total Current LiabilitiesNet Income$ 35,000Notes PayableTotal Liabilities40,000110,00050,000150.000Stockholder EquityCommon Stock75,00080.000Ending Retained EarningsTotal Stockholder EquityTotal Liabilities and Stockholder Equity20.000100.00015,00090,000$200.000$250.000 1. Caribbean Health Foods had sales of $125,000 in March. and Forecast sales for Aprilis expected to be 130,000. The firm has a cash balance of $5,000 on April 1 andwishes to maintain a minimum cash balance of $25,000.(1) The firm makes 70% of sales for cash, 30% are collected in the next month.The firm's actual for March is $75,000 and the expected purchases for April is$80,000, 50% made for cash and 50% paid in the next month.Rent is $10,000 per month.(4) Wages and salaries are 45% of the previous month's sales.(5) Cash dividends of $5,000 will be paid in April.(6) Payment of principal and interest of $4,000 is paid monthly.(7) A cash purchase of equipment costing $10,000 is scheduled in April.(8) Taxes of $2,000 are due in April.Requirement:Given the above data, prepare and interpret a cash budget for the month of April.2. Barry's Superstore wishes to prepare financial plans. Use the financial statements onthe next page and the other information provided below to prepare the financial plans.The following financial data are also available:(1) The firm has estimated that its sales for next year will be $130,000.(2) The firm expects to pay $30,000 in cash dividends.(3) The firm wishes to maintain a minimum cash balance of $25,000.(4) Accounts receivable represent approximately 20% of annual sales.(5) The firm's ending inventory represents 60% of Cost of Goods Sold.(6) A new machine costing $15,000 will be purchased next year.(7) Accounts payable will increase by 5%.(8) Uneamed Revenue will be earned.(9) Notes Payable would decrease by $5000.(10) Short-Term Investments and common stock will remain unchanged.Requirement:a. Prepare a pro forma income statement for the year ended December 31, 2021, usingthe percent-of-sales method. Tax Rate is expected to be 15%.b. Prepare a pro forma balance sheet dated December 31, 2021, using the judgmentalapproach.c. Analyze these statements, and discuss the resulting external financing required

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Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter21: Cash Budgeting (cashbud)

Section: Chapter Questions

Problem 1R: On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is...

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Similar questions

Halifax Shoes has 30% of its sales in cash and the remainder on credit. Of the credit sales, 65% is collected in the month of sale, 25% is collected the month after the sale, and 5% is collected the second month after the sale. How much cash will be collected in August if sales are estimated as $75,000 in June, $65,000 in July, and $90,000 in August?
Earthies Shoes has 55% of its sales in cash and the remainder on credit. Of the credit sales, 70% is collected in the month of sale, 15% is collected the month after the sale, and 10% is collected the second month after the sale. How much cash will be collected in June if sales are estimated as $75,000 in April, $65,000 in May, and $90,000 in June?
Cash collections for Renew Lights found that 65% of sales were collected in the month of sale, 25% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in March and April?
A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
On January 1, Sweet Pleasures, Inc., begins business. The company has 14,000 cash on hand and is attempting to project cash receipts and disbursements through April 30. On May 1, a note payable of 10,000 will be due. This amount was borrowed on January 1 to carry the company through its first four months of operation. The unit purchase cost of the companys single product, a box of Sweet Pleasures chocolates, is 12. The unit sales price is 28. Projected purchases and sales in units for the first four months are: Sales terms call for a 5% discount if paid within the same month that the sale occurred. It is expected that 50% of the billings will be collected within the discount period, 25% by the end of the month after purchase, 19% in the following month, and 6% will be uncollectible. Approximately 60% of the purchases are paid for in the month purchased. The rest are due and payable in the next month. Total fixed marketing and administrative expenses for each month include cash expenses of 5,000 and depreciation on equipment of 2,000. Variable marketing and administrative expenses total 6 per unit sold. All marketing and administrative expenses are paid as incurred. REQUIREMENT You have been asked to prepare a cash budget for the next four months to see if the loan can be repaid. Review the worksheet CASHBUD that follows these requirements. The problem data have already been entered in the Data Section of the worksheet.
Ranger Industries has provided the following information at June 30: Other information: Average selling price, 196 Average purchase price per unit, 110 Desired ending inventory, 40% of next months unit sales Collections from customers: In month of sale20% In month after sale50% Two months after sale30% Projected cash payments: Inventory purchases are paid for in the month following acquisition. Variable cash expenses, other than inventory, are equal to 25% of each months sales and are paid in the month of sale. Fixed cash expenses are 40,000 per month and are paid in the month incurred. Depreciation on equipment is 2,000 per month. REQUIREMENT You have been asked to prepare a master budget for the upcoming quarter (July, August, and September). The components of this budget are a monthly sales budget, a monthly purchases budget, a monthly cash budget, a forecasted income statement for the quarter, and a forecasted September 30 balance sheet. The worksheet MASTER has been provided to assist you. Ranger Industries desires to maintain a minimum cash balance of 8,000 at the end of each month. If this goal cannot be met, the company borrows the exact amount needed to reach its goal. If the company has a cash balance greater than 8,000 and also has loans payable outstanding, the amount in excess of 8,000 is paid to the bank. Annual interest of 18% is paid on a monthly basis on the outstanding balance.
Cash collections for Wax On Candles found that 60% of sales were collected in the month of the sale, 30% was collected the month after the sale, and 10% was collected the second month after the sale. Given the sales shown, how much cash will be collected in January and February?
My Aunts Closet Store collects 60% of its accounts receivable in the month of sale and 35% in the month after the sale. Given the following sales, how much cash will be collected in March?
Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?
Trumbull Co. plans to produce 100,000 toy cars during September. Planned production for October is 125,000 cars. Sales are forecasted at 90,000 toy cars for September and 120,000 toy cars for October. Each toy car requires four wheels. Trumbulls policy is to maintain 10 percent of the next months production in inventory at the end of a month. How many wheels should Tram bull purchase during September? a. 195,000 b. 112,500 c. 102,500 d. 410,000
If the sales forecast estimates that 50,000 units of product will be sold during the following year, should the factory plan on manufacturing 50,000 units in the coming year? Explain.
One Device makes universal remote controls and expects to sell 500 units in January, 800 in February, 450 in March, 550 in April, and 600 in May. The required ending inventory is 20% of the next months sales. Prepare a production budget for the first four months of the year.

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