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Income Statement and Budgeted Balance Sheet. Crow Enterprises is a merchandising company that is preparing a master budget for the third quan of the calendar year. The company's balance sheet as of June 30th is shown below: Crow Enterprises Balance Sheet June 30 Assets $ 80,000 135,000 41,250 Plant and equipment, net of depreciation_211,000 S 457,250 Cash Accounts receivable Inventory Total assets Liabilities and Stockholders' Equity $ 72,000 345,000 50,250 Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 467,250 Crow's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cos of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. ll the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of th total amount is depreciation expense and the remaining $34,000 relates to expenses that paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarte ended September 30. The company does not plan to issue any common stock or repurcha

Income Statement and Budgeted Balance Sheet. Crow Enterprises is a merchandising company that is preparing a master budget for the third quan of the calendar year. The company's balance sheet as of June 30th is shown below: Crow Enterprises Balance Sheet June 30 Assets $ 80,000 135,000 41,250 Plant and equipment, net of depreciation_211,000 S 457,250 Cash Accounts receivable Inventory Total assets Liabilities and Stockholders' Equity $ 72,000 345,000 50,250 Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 467,250 Crow's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cos of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. ll the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of th total amount is depreciation expense and the remaining $34,000 relates to expenses that paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarte ended September 30. The company does not plan to issue any common stock or repurcha

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter22: Budgeting
Section: Chapter Questions
Problem 6PB: Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of...
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Schedules of Expected Cash Collections and Disbursements; Budgeted Income Statement and Budgeted Balance Sheet. Crow Enterprises is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company's balance sheet as of June 30th is shown below: Crow Enterprises Balance Sheet June 30 Assets $ 80,000 135,000 41,250 Plant and equipment, net of depreciation_211,000 $ 457,250 Cash Accounts receivable Inventory Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 72,000 345,000 50,250 Total liabilities and stockholders' equity $ 467,250 Crow's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
Transcribed Image Text:Schedules of Expected Cash Collections and Disbursements; Budgeted Income Statement and Budgeted Balance Sheet. Crow Enterprises is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company's balance sheet as of June 30th is shown below: Crow Enterprises Balance Sheet June 30 Assets $ 80,000 135,000 41,250 Plant and equipment, net of depreciation_211,000 $ 457,250 Cash Accounts receivable Inventory Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 72,000 345,000 50,250 Total liabilities and stockholders' equity $ 467,250 Crow's managers have made the following additional assumptions and estimates: 1. Estimated sales for July, August, September, and October will be $220,000, $240,000, $230,000, and $250,000, respectively. 2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July. 3. Each month's ending inventory must equal 25% of the cost of next month's sales. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July. 4. Monthly selling and administrative expenses are always $40,000. Each month $6,000 of this total amount is depreciation expense and the remaining $34,000 relates to expenses that are paid in the month they are incurred. 5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.
2. You are provided with the following merchandise purchase budget for Q3. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September also showing the 3rd quarter totals. Budgeted COGS (75% of sales) add: desired ending inventory (25%) equals: total needs less: beginning inventory equals: required purchases July 165,000| 45,000 210,000 41,250 168,750 August September 180,000 172,500 43,125 46,875 223,125 219,375| 45,000 43,125 178,125 176,250 Q3 517,500 46,875 564,375 41,250 523,125 2b. Schedule of expected cash disbursements July August September Q3 From A/P From July purchases From Aug purchases From Sep purchases Total cash disbursements
Transcribed Image Text:2. You are provided with the following merchandise purchase budget for Q3. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September also showing the 3rd quarter totals. Budgeted COGS (75% of sales) add: desired ending inventory (25%) equals: total needs less: beginning inventory equals: required purchases July 165,000| 45,000 210,000 41,250 168,750 August September 180,000 172,500 43,125 46,875 223,125 219,375| 45,000 43,125 178,125 176,250 Q3 517,500 46,875 564,375 41,250 523,125 2b. Schedule of expected cash disbursements July August September Q3 From A/P From July purchases From Aug purchases From Sep purchases Total cash disbursements
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