Reference no: EM13753290
Task: Master Budget Problem
The Schrödinger Science Store operates a retail store in a local shopping mall. The results of operations for the fourth quarter of the past year are as follows:
Sales and cost of sales are expected to increase by 15 percent in each of the next two quarters.
Seventy percent of sales are collected in the quarter of sale, and 25 percent are collected in the quarter following sale.
The balance in accounts receivable at the end of the past year relates to sales in the fourth quarter of the past year.
Inventory purchases in the fourth quarter of the past year are $200,000.
The balance in accounts payable at the end of the past year relates to purchases in the fourth quarter of the past year.
Inventory at the end of the past year is $150,000. The company plans to hold ending inventory equal to 70 percent of subsequent quarter cost of sales.
Selling, general, and administrative expenses are expected to increase by $10,000 owing to increases in advertising and salaries. All other expenses in this category are expected to remain constant.
Fifty percent of inventory purchases are paid in the quarter of purchase, and 50 percent are paid in the following quarter. All other expenses, including taxes, are paid in the quarter incurred.
Selling, general, and administrative expense includes $2,000 of depreciation related to furniture and fixtures with a book value (net of accumulated depreciation) of $50,000 at the end of the past year.
The tax rate is expected to remain at 40 percent.
The cash balance at the end of the past year is $30,000.
Common stock at the end of the past year is $80,000 and retained earnings are $137,500.
Asset accounts are cash, accounts receivable, inventory, and furniture and fixtures. The only liability account is accounts payable. Owner’s equity accounts are common stock and retained earnings.
Based on this information, perform the following tasks:
1. Prepare a budgeted income statement for the first quarter of the next year.
2. Prepare a cash budget for the first quarter of the next year.
3. Prepare a budgeted balance sheet as of the end of the first quarter of the next year.
4. The company is discussing the possibility of opening a new store late in the first quarter of the next year. A store opening would require cash payments of $50,000. Assuming the company wants a minimum cash balance of $30,000 at the end of the first quarter; can a new store be opened without obtaining additional funds?
|
Share cash dividend on its common stock
: Watkins Enterprises earned net income of $95,000 during the year ended December 31,2012. On December 15, 2012, Watkins Enterprises declared the annual cash dividend on its 2% preferred stock (total par value, $140,000) and a $0.70 per share cash divi..
|
|
Calculate stews self-employment tax
: Stew is a self-employed surfboard-maker in 2014. His schedule C net income is $104,000 for the year. He also has a part time job and earns $8,500 in wages subject to FICA taxes. Calculate Stew's self-employment tax for 2014 using Schedule SE.
|
|
Apply against his first quarter estimated tax payment
: Harold Conners (Social Security number 785-23-9873) lives at 13234 DeMilo Drive, Houston, TX 77052, and is self-employed for 2014. He estimates his required annual estimated tax payment for 2014 to $6,544. He had a $674 overpayment of last year’s tax..
|
|
Hat is number of withholding allowances should phan claim
: Phan Mai is a single taxpayer with two dependent children under 17. Phan estimates her wages for the year will be $36,000 and her itemized deductions will be $11,000. Assuming Pha files as head of household. What is the number of withholding allowanc..
|
|
Master budget problem
: The Schrödinger Science Store operates a retail store in a local shopping mall. The results of operations for the fourth quarter of the past year are as follows: Sales and cost of sales are expected to increase by 15 percent in each of the next two q..
|
|
Activity-based costing problem
: The Divine Cheesecake Shoppe is a national bakery that is known for its strawberry cheesecake. It also makes 12 different kinds of cheesecake as well as many other types of bakery items. It has recently adopted an activity-based costing system to ass..
|
|
Determine gross profit
: Build a model to help a company determine gross profit. Gross profit is simply the excess of revenues over expenses. The company’s total costs contain both fixed and variable costs. Fixed costs are the same no matter how many units they sell, and var..
|
|
Description amount description amount
: A summary of the time tickets for August follows: Description Amount Description Amount Job No. 321 $11,000 Job No. 342 $8,300 Job No. 329 9,200 Job No. 346 5,700 Job No. 336 3,000 Present the journal entries to record (a) the labor cost incurred and..
|
|
What is the function of a credit rating agency
: What is the function of a credit rating agency and why have these agencies prospered- why do credit ratings under pip the world's financial system'?
|