Please do not give image format Current assets as of April 1, 2022, consist of cash of $28,000 and accounts receivable of $299,600 ($209,720 from Marchcredit sales and $89,880 from February credit sales). Current liabilities as of April 1 consist of $36,000 of accounts payablefor product costs incurred in March; $9,200 of accrued liabilities for operating expenses incurred in March; and a $80,000,11%, 120-day note payable that is due on April 17, 2022.An estimated income tax payment of $80,000 will be made in May. The regular quarterly dividend of $32,000 is expectedto be declared in May and paid in June. Capital expenditures amounting to $34,400 will be made in April.Required:a. Complete the monthly cash budgets for the second quarter of 2022 using the following format. Note that the endingcash balance for June is provided as a check figure.b. Assume that management of SeaTech Incorporated desires to maintain a minimum cash balance of $18,400 at thebeginning of each month and has arranged a $100,000 line of credit with a local bank at an interest rate of 11% to ensurethe availability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cashbalance would otherwise fall short of the $18,400 minimum balance. Repayments of principal and interest are to occur atthe end of the earliest month in which sufficient funds are expected to be available for repayment.Complete this question by entering your answers in the tabs below.Required A Required BAssume that management of SeaTech Incorporated desires to maintain a minimum cash balance of $18,400 at the beginningof each month and has arranged a $100,000 line of credit with a local bank at an interest rate of 11% to ensure theavailability of funds. Borrowing transactions are to occur only at the end of months in which the budgeted cash balance wouldotherwise fall short of the $18,400 minimum balance. Repayments of principal and interest are to occur at the end of theearliest month in which sufficient funds are expected to be available for repayment.Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollars. Use 360 days year forcalculations. Following are the budgeted income statements for the second quarter of 2022 for SeaTech Incorporated:SalesCost of goods sold*Gross profitOperating expensestOperating incomeApril$ 280,000192,000$ 88,00044,000$ 44,000May$ 340,000228,000$ 112,00050,000$ 62,000June$ 380,000252,000$ 128,000.54,000$ 74,000* Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).† Includes all period costs (i.e., selling, general, and administrative expenses).The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collected inthe first month after the sale is made, and 40% are expected to be collected in the second month after sale. Depreciation,insurance, and property taxes represent $24,000 of the estimated monthly cost of goods sold and $16,000 of the estimatedmonthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid inAugust. Of the remainder of the cost of goods sold and operating expenses, 80% are expected to be paid in the month inwhich they are incurred, and the balance is expected to be paid in the following month.Current assets as of April 1, 2022, consist of cash of $28,000 and accounts receivable of $299,600 ($209,720 from Marchcredit sales and $89,880 from February credit sales). Current liabilities as of April 1 consist of $36,000 of accounts payablefor product costs incurred in March; $9,200 of accrued liabilities for operating expenses incurred in March; and a $80,000,11%, 120-day note payable that is due on April 17, 2022.An estimated income tax payment of $80,000 will be made in May. The regular quarterly dividend of $32,000 is expectedto be declared in May and paid in June. Capital expenditures amounting to $34,400 will be made in April.Required:Complete the monthly rach hudente for the cocond auarter of 2022 einn the following format Note that the ending

Budget:Budget is a plan that a company drafts in order to forecast their incomes and expenditures.…

Following are the budgeted income statements for the second quarter of 2022 for SeaTech Incorporated: Sales Cost of goods sold* Gross profit Operating expensest Operating income April $ 280,000 192,000 $ 88,000 44,000 $ 44,000 May $ 340,000 228,000 $ 112,000 50,000 $ 62,000 June $ 380,000 252,000 $ 128,000 54,000 $ 74,000 * Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead). † Includes all period costs (i.e., selling, general, and administrative expenses). The company expects about 30% of sales to be cash transactions. Of sales on account, 60% are expected to be collected in the first month after the sale is made, and 40% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $24,000 of the estimated monthly cost of goods sold and $16,000 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 80% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month. Current assets as of April 1, 2022, consist of cash of $28,000 and accounts receivable of $299,600 ($209,720 from March credit sales and $89,880 from February credit sales). Current liabilities as of April 1 consist of $36,000 of accounts payable for product costs incurred in March; $9,200 of accrued liabilities for operating expenses incurred in March; and a $80,000, 11%, 120-day note payable that is due on April 17, 2022. An estimated income tax payment of $80,000 will be made in May. The regular quarterly dividend of $32,000 is expected to be declared in May and paid in June. Capital expenditures amounting to $34,400 will be made in April.

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 10CE: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects...