A merchandise purchases budget for july august and

Reference no: EM13579869

Janus Products, Inc., is a merchandising company that sells binders, paper, and other school supplies. The company is planning its cash needs for the third quarter. In the past, Janus Products has had to borrow money during the third quarter to support peak sales of back-to-school materials, which occur during August. The following information has been assembled to assist in preparing a cash budget for the quarter:

a.	Budgeted monthly absorption costing income statements for July-October are as follows:

	July		August		September		October
Sales	$	38,000	$	68,000	$	66,000	$	43,000
Cost of goods sold		22,000		40,000		30,000		25,000

Gross margin		16,000		28,000		36,000		18,000

Selling and administrative expenses:
Selling expense		6,400		10,600		8,700		8,200
Administrative expense*		3,400		6,400		6,800		6,200

Total selling and administrative expenses		9,800		17,000		15,500		14,400

Net operating income	$	6,200	$	11,000	$	20,500	$	3,600

*Includes $1,600 depreciation each month.

b.	Sales are 30% for cash and 70% on credit.
c.	Credit sales are collected over a three-month period with 10% collected in the month of sale, 55% in the month following sale, and 35% in the second month following sale. May sales totaled $42,000, and June sales totaled $30,000.
d.	Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $12,200.
e.	The company maintains its ending inventory levels at 80% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $17,600.
f.	Land costing $4,600 will be purchased in July.
g.	Dividends of $1,700 will be declared and paid in September.
h.	The cash balance on June 30 is $6,000; the company must maintain a cash balance of at least this amount at the end of each month.
i.	The company has an agreement with a local bank that allows it to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $40,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:
1.	Prepare a schedule of expected cash collections for July, August, and September and for the quarter in total. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.)

Schedule of Expected Cash Collections
	July	August	September	Quarter
Cash sales	$ ?	$?	$?	$?
Sales on account:
May	$?	$?	$?	$?
June	$?	$?	$?	$?
July	$?	$?	$?	$?
August	$?	$?	$?	$?
September	$?	$?	$?	$?

Total cash collections	$?	$?	$?	$?

2.	Prepare the following for merchandise inventory:

a.	A merchandise purchases budget for July, August, and September. (Input all amounts as positive values. Do not round intermediate calculations.)

Merchandise Purchases Budget
	July	August	September
Budgeted cost of goods sold	$?	$?	$?
Add: Ending inventory	$?	$?	$?

Total needs	$?	$?	$?
Deduct: Beginning inventory	$?	$?	$?

Required inventory purchases	$?	$?	$?

b.	A schedule of expected cash disbursements for merchandise purchases for July, August, and September and for the quarter in total. (Leave no cells blank - be certain to enter "0" wherever required.)

Schedule of Expected Cash Disbursements
	July	August	September	Quarter
Accounts payable, June 30	$?	$?	$?	$?
July purchases	$?	$?	$?	$?
August purchases	$?	$?	$?	$?
September purchases	$?	$?	$?	$?

Total cash disbursements	$?	$?	$?	$?

Prepare a cash budget for July, August, and September and for the quarter in total. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed. Selling and Administrative expenses are paid in the month in which the expenses are incurred. Leave no cells blank - be certain to enter "0" wherever required.)

Janus Products, Inc. Cash Budget For the Quarter Ended September 30
	July	August	September	Quarter
Cash balance, beginning	$?	$?	$?	$?
Add collections from sales	$?	$?	$?	$?

Total cash available	$?	$?	$?	$?

Less disbursements:
For inventory purchases	$?	$?	$?	$?
For selling expenses	$?	$?	$?	$?
For administrative expenses	$?	$?	$?	$?
For land	$?	$?	$?	$?
For dividends	$?	$?	$?	$?

Total disbursements	$?	$?	$?	$?

Excess (deficiency) of cash available over disbursements	$?	$?	$?	$?

Financing:
Borrowings	$?	$?	$?	$?
Repayment	$?	$?	$?	$?
Interest	$?	$?	$?	$?

Total financing	$?	$?	$?	$?

Cash balance, ending	$?	$?	$?	$ ?

Reference no: EM13579869

Questions Cloud

Castleman holdings inc had the following available-for-sale : castleman holdings inc. had the following available-for-sale investment portfolio at january 1 2014.evers company1240

If 100 random samples of size n were drawn and if for each : question 1 if 100 random samples of size n were drawn and if for each a 99 confidence interval fornbspmu was computed

A random sample of mens soccer shoes from an international : a random sample of mens soccer shoes from an international catalog had the following weights in ounces10.8 9.8 8.8 9.6

Innovation cycles uses the fifo inventory method : innovation cycles uses the fifo inventory method. innovation started march with 10 bicycles that cost 60 each. on march

A merchandise purchases budget for july august and : janus products inc. is a merchandising company that sells binders paper and other school supplies. the company is

If 22 tickets are sold and 2 prizes are to be awarded find : if 22 tickets are sold and 2 prizes are to be awarded find the probablilty that one person will win two prizes if that

Miscellaneous administrative expense 1750 per month plus 1 : agent blaze uses flexible budgets that are based on the following datasales commissionsnbsp 6 of salesadvertising

If the distribution of the measure of a random variable is : if the distribution of the measure of a random variable is not a normal distribution what implications might that fact

Oscarson midwiferyu2019s cost formula for its wages and : oscarson midwiferyu2019s cost formula for its wages and salaries is 2720 per month plus 351 per birth. for the month of

User Account

All Pages