Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balance Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 47,000 205,600 58,800 357,000 $ 87,225 500,000 81,175 $ 668,400 $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March April $ 257,000 $ 392,000 $ 589,000 $303,000 $ 200,000 C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The acco receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; ship of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will E $43,220 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be pu for cash at a cost of $73,500. d vidondr
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balance Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 47,000 205,600 58,800 357,000 $ 87,225 500,000 81,175 $ 668,400 $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March April $ 257,000 $ 392,000 $ 589,000 $303,000 $ 200,000 C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The acco receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; ship of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will E $43,220 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be pu for cash at a cost of $73,500. d vidondr
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
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Chapter8: Budgeting For Planning And Control
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Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Transcribed Image Text:Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been
assembled to assist in preparing the master budget for the first quarter:
a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances:
Cash
Accounts receivable
Inventory
Buildings and equipment (net)
Accounts payable
Common stock
Retained earnings
$ 47,000
205,600
58,800
357,000
$ 87,225
500,000
81,175
$ 668,400 $ 668,400
b. Actual sales for December and budgeted sales for the next four months are as follows:
December(actual)
January
February
March
$ 257,000
$ 392,000
$ 589,000
$ 303,000
$ 200,000
April
c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts
receivable at December 31 are a result of December credit sales.
d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; shipping, 5%
of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be
$43,220 for the quarter.
f. Each month's ending inventory should equal 25% of the following month's cost of goods sold.
g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased
for cash at a cost of $73,500.
i. During January, the company will declare and pay $45,000 in cash dividends.
Transcribed Image Text:Using the data above, complete the following statements and schedules for the first quarter:
1. Schedule of expected cash collections:
2-a. Merchandise purchases budget:
2-b. Schedule of expected cash disbursements for merchandise purchases:
3. Cash budget:
4. Prepare an absorption costing income statement for the quarter ending March 31.
5. Prepare a balance sheet as of March 31.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2A
Required 2B
Required 3
Required 4
Required 5
Complete the cash budget. (Cash deficiency, repayments and interest should be indicated by a minus sign.)
Hillyard Company
Cash Budget
January
February
March
Quarter
Beginning cash balance
47,000
Add collections from customers
284,000
Total cash available
331,000
Less cash disbursements:
Inventory purchases
219,600
Selling and administrative expenses
115,360
Equipment purchases
Cash dividends
45,000
Total cash disbursements
379,960
0.
0.
Excess (deficiency) of cash
(48,960)
0.
0.
%24
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