CRAVAT SALES COMPANY-Budgets

CRAVAT SALES COMPANY

Minimum ending cash balance		$ 10,000
Selling price (per unit)		$ 8.10

Recent and forecast sales (in units):
January (actual)		20,000
February (actual)		24,000
March (actual)		28,000
April		33,000
May		41,000
June		65,000
July		40,000
August		36,000
September		32,000

Desired ending inventories (percentage		75%
of next month's sales)
Cost of ties (per unit)		$ 4.85

Purchases paid as follows:
In month of purchase		50%
In following month		50%

Collection on sales:
Sales collected current month		30%
Sales collected following month		60%
Sales collected 2nd month following		10%

Variable monthly expenses:
Sales commissions (per tie)		$ 1.00

Fixed monthly expenses:
Wages and salaries		$ 22,000
Utilities		$ 14,000
Insurance		$ 1,200
Depreciation		$ 1,500
Miscellaneous		$ 3,000

Land purchased in May		$ 30,000
Dividends declared each quarter		$ 12,000

Balance sheet at March 31:
Assets
Cash		$ 14,000
Accounts receivable
February sales	$ 19,440
March sales	1,58,760	1,78,200
Inventory (24,750 units)		1,20,037.50
Prepaid insurance		14,400
Fixed assets, net of depreciation		1,72,700
Total assets		$ 4,99,337.50

Liabilities and Stockholders' Equity
Accounts payable		$ 76,993.75
Dividends payable		12,000
Capital stock		3,00,000
Retained earnings		1,10,343.75
Total liabilities and stockholders' equity		$ 4,99,337.50

Agreement with Bank:
Borrowing increments		$ 1,000
Maximum borrowing amount		$3,00,000
Interest rate per month		1%
Repayment increments		$ 1,000
Total of interest paid each quarter		100%
Required minimum cash balance		$ 12,000


Prepare following budgets
1a. Sales budget:
1b. Schedule of expected cash collections:
1c. Merchandise purchases budget:
1d. Budgeted cash disbursements for inventory purchases:
Cash Budget
Budgeted Income Statement
Budgeted Balance Sheet

11 years ago

Report issue

CRAVAT SALES COMPANY-Budgets

NOT RATED

Purchase the answer to view it

cravat_sales_company_budgets.xlsx