homework for accounting

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C08-29

	Student Name:	AllenR.mod.4
	Class:
		Case 08-29
CRAVAT SALES COMPANY
Budgets
			April	May	June	Quarter
1a. Sales budget:
Budgeted sales in units			35,000	45,000	60,000	140,000
Selling price per unit			$ 8	$ 8	$ 8	$ 8
Total sales			$ 280,000	$ 360,000	$ 480,000	$ 1,120,000
			Correct!	Correct!	Correct!	Correct!
1b. Schedule of expected cash collections:
February sales			$ 48,000			$ 48,000
March sales			112,000	56,000		168,000
April sales			70,000	140,000	$ 70,000	280,000
May sales				90,000	180,000	270,000
June sales					120,000	120,000
Total cash collections			$ 230,000	$ 286,000	$ 370,000	$ 886,000
			Correct!	Correct!	Correct!	Correct!
1c. Merchandise purchases budget:
Budgeted sales in units
Add budgeted ending inventory
Total needs
Less beginning inventory
Required unit purchases
Unit cost
Required dollar purchases
			0	0	0	0
1d. Budgeted cash disbursements for merchandise purchases:
March purchases
April purchases
May purchases
June purchases
Total cash payments
			0	0	0	0
2.
CRAVAT SALES COMPANY
Cash Budget
For the Three Months Ending June 30
			April	May	June	Quarter
Cash balance, beginning
Add receipts from customers
Total cash available
Less disbursements:
Purchase of inventory
Sales commissions			35,000	45,000	60,000	140,000
Salaries and wages			22,000	22,000	22,000	66,000
Utilities			14,000	14,000	14,000	42,000
Miscellaneous			3,000	3,000	3,000	9,000
Dividends paid			4,000	4,000	4,000	12,000
Land purchases				25,000
Total disbursements
Excess (deficiency) of receipts
over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending
			0	0	0	0
3.
CRAVAT SALES COMPANY
Budgeted Income Statement
For the Three Months Ended June 30
Sales in units
Sales
Variable expenses:
Cost of goods sold
Commissions
Contribution margin
Fixed expenses:
Salaries and wages			22,000
Utilities			14,000
Insurance expired
Depreciation			1,500
Miscellaneous			3,000
Net operating income
Less interest expense
Net income
				0
4.
CRAVAT SALES COMPANY
Budgeted Balance Sheet
June 30
Assets
Cash
Accounts receivable
Inventory
Unexpired insurance
Fixed assets, net of depreciation
Total assets
			-
Liabilities and Stockholders' Equity
Accounts payable, purchases
Dividends payable
Loans payable, bank
Capital stock, no par
Retained earnings
Total liabilities and equity
			-
Accounts receivable at June 30:
May sales
June sales
Total
			-
Retained earnings at June 30:
Balance, March 31			$ 14,000
Add net income
Total
Less dividends declared			12,000
Balance, June 30
			0

Enter the appropriate data in the yellow cells. Your final answers for each section will be verified.

Enter the appropriate data in the yellow cells. Your answers for "Cash balance, ending" will be verified.

Enter the appropriate data in the yellow cells. Your answer for "Net income" will be verified.

Enter the appropriate data in the yellow cells. Your answer for "Total assets" will be verified.

HINT: Use calculation below.

Given C08-29

Given Data Case 08-29:
CRAVAT SALES COMPANY
Minimum ending cash balance		$ 10,000
Selling price		$ 8
Recent and forecast sales (in units):
January (actual)		20,000
February (actual)		24,000
March (actual)		28,000
April		35,000
May		45,000
June		60,000
July		40,000
August		36,000
September		32,000
Desired ending inventories (percentage		90%
of next month's sales)
Cost of earrings		$ 5
Purchases paid as follows:
In month of purchase		50%
In following month		50%
Collection on sales:
Sales collected current month		25%
Sales collected following month		50%
Sales collected 2nd month following		25%
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		$ 25,000
Dividends declared each quarter		$ 12,000
Balance sheet at March 31:
Assets
Cash		$ 14,000
Accounts receivable
February sales	$ 48,000
March sales	168,000	216,000
Inventory (31,500 units)		157,500
Prepaid insurance		14,400
Fixed assets, net of depreciation		172,700
Total assets		$ 574,600
Liabilities and Stockholders' Equity
Accounts payable		$ 85,750
Dividends payable		12,000
Capital stock		300,000
Retained earnings		176,850
Total liabilities and stockholders' equity		$ 574,600
Agreement with Bank:
Borrowing increments		$ 1,000
Maximum borrowing amount		$ 40,000
Interest rate per month		1%
Repayment increments		$ 1,000
Total of interest paid each quarter		100%
Required minimum cash balance		$ 10,000