| | Exercise 21-22A |
| | Preparing a master budget for a retail company with no beginning account balance. |
| | a. Prepare a sales budget. |
| | b. Prepare a schedule of cash receipts |
| | Unici Company |
| | Sales Budget |
| | a. | | | | Pro Forma Data |
| | Section 1 : Projected Sales | Oct | Nov | Dec |
| | Cash Sales | $48,000 | $60,000 | $75,000 |
| | Sales on Account | $72,000 | $90,000 | $112,500 | $112,500 |
| | Total Budgeted Sales | $120,000 | $150,000 | $187,500 | $457,500 |
| | b. |
| | Section 2: Schedule of Cash Receipts |
| | Current Cash Sales | $48,000 | $60,000 | $75,000 |
| | Plus Collections of Account Receivable | $0 | $72,000 | $90,000 |
| | Total Budgeted Collections | $48,000 | $132,000 | $165,000 |
| | c. Prepare an inventory purchases budget |
| | d. Prepare a cash payments budget for inventory purchases. |
| | Unici Company |
| | Inventory Purchases Budget |
| | c. |
| | Section 1 : Projected Purchases | Oct | Nov | Dec |
| | Budgeted Cost of Goods Sold | $72,000 | $90,000 | $112,500 | $274,500 |
| | Plus Desired Ending Inventory | $9,000 | $11,250 | $12,000 | $12,000 |
| | Total Inventory Needed | $81,000 | $101,250 | $124,500 |
| | Less Beginning Inventory | $0 | $9,000 | $11,250 |
| | Required Purchases (on account) | $81,000 | $92,250 | $113,250 | $33,975 |
| | d. |
| | Section 2 : Schedule of Cash Payments for Inventory Purchases |
| | Pay 70% of Current Month AP | $56,700 | $64,575 | $79,275 |
| | Pay 30% of Prior Month AP | $0 | $24,300 | $27,675 |
| | Total Budgeted Disbursements for Inv. | $56,700 | $88,875 | $106,950 |
| | e. Prepare a selling and administrative expenses budget |
| | f. Prepare a cash payments budget for selling and administrative expenses. |
| | Unici Company |
| | Selling and Administrative Expense Budget |
| | e. |
| | Section 1 : Projected S&A Expenses | Oct | Nov | Dec |
| | Salary Expense | $18,000 | $18,000 | $18,000 |
| | Sales Commissions, 5% of Sales | $6,000 | $7,500 | $9,375 |
| | Supplies Expense, 2% of Sales | $2,400 | $3,000 | $3,750 |
| | Utilities Expense | $1,400 | $1,400 | $1,400 | $1,400 |
| | Depreciation Expense on Store Fixtures | $4,000 | $4,000 | $4,000 | $12,000 |
| | Rent | $4,800 | $4,800 | $4,800 |
| | Miscellaneous Expense | $1,200 | $1,200 | $1,200 |
| | Total S&A Expenses before Interest | $37,800 | $39,900 | $42,525 | $120,225 |
| | Section 2 : Schedule of Cash Payments for S&A Expenses |
| | Salary Expense | $18,000 | $18,000 | $18,000 |
| | Sales Commissions, 5% of Sales | $0 | $6,000 | $7,500 | $13,500 |
| | Supplies Expense, 2% of Sales | $2,400 | $3,000 | $3,750 |
| | 100% of Prior Month Utilities Expense | $0 | $1,400 | $1,400 |
| | Rent | $4,800 | $4,800 | $4,800 |
| | Miscellaneous Expense | $1,200 | $1,200 | $1,200 |
| | Total S&A Expenses before Interest | $26,400 | $34,400 | $36,650 |
| | g. Prepare a cash budget |
| | Unici Company |
| | Cash Budget |
| | Section 1 : Cash Receipts | Oct | Nov | Dec |
| | Beginning Cash Balance | $0 | $12,000 | $12,000 |
| | Add Cash Receipts | $48,000 | $60,000 | $75,000 |
| | Total Cash Available | $48,000 | $72,000 | $87,000 |
| | Section 1 : Cash Payments |
| | For Inventory Purchases | $56,700 | $88,875 | $106,950 |
| | For S&A Expenses | $26,400 | $34,400 | $36,650 |
| | For Interest Expense | $0 | $2,111 | $654 | $2,765 |
| | For Purchase of Store Fixtures | $164,000 | $0 | $0 |
| | Total Budget Disbursements | $247,100 | $125,386 | $144,254 |
| | Section 3: Financing Activities |
| | Surplus (Shortage) | ($199,100) | ($53,386) | ($57,254) |
| | Borrowing (Repayment) | $211,100 | $65,386 | $69,254 | $345,740 |
| | Ending Cash Balance | $12,000 | $12,000 | $12,000 |
| | h. Prepare a pro forma income statement for the quarter. |
| | Unici Company |
| | Pro Forma Income Statement |
| | For the Quarter Ended December 31, 2006 |
| | Sales Revenue | | $457,500 |
| | Cost of Goods Sold | | $274,500 |
| | Gross Margin | | $183,000 |
| | Selling & Admin Expenses | | 120,225 |
| | Operating Income | | 62,775 |
| | Interest Expense | | 2,765 |
| | Net Income | | $60,010 |
| | i. Prepare a pro forma balance sheet at the end of the quarter. |
| | Unici Company |
| | Pro Forma Balance Sheet |
| | For the Quarter Ended December 31, 2006 |
| | Assets |
| | Cash | | | $12,000 |
| | Accounts Receivable | | | $112,500 |
| | Inventory | | | $12,000 |
| | Store Fixtures | $164,000 |
| | Accumulated Depreciation | 12,000 |
| | Book Value of Store Fixtures | | | 152,000 |
| | Total Assets | | | $288,500 |
| | Liabilities |
| | Accounts Payable | | | $33,975 |
| | Sales Commissions Payable | | | $13,500 |
| | Utilities Payable | | | $1,400 |
| | Line of Credit Borrowings | | | $345,740 |
| | Equity | | | 0 |
| | Retained Earnings |
| | Total Liabilities and Equity | | | $394,615 | | $106,115 |
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wk3_-_lt_deliv_-_krk.xlsx
