Reference no: EM132524673
ZYZ Company is a retail outlet for various products. The manager is concerned to prepare budget for the next quarter. He is so interested to know the cash position so that he may need to borrow money to finance purchases. He has gathered all data necessary to prepare budget.
In addition.
- Equipment will be purchased in April for br. 19,750 cash and dividend of br. 4,000 will be paid in June.
- The master budget is prepared for the month of April, May & June.
- Both borrowing & repayment occurs at the end of the month
- Interest is also paid at the end of a month at 12% annual rate on the amount of the payable outstanding during the month.
XYZ Company
Balance sheet
As march 31, 2007
Asset Liability & equity
Cash --------------------------- 9,000 Interest payable ------------------ 0
A/R --------------------- ----- 48,000 Notes payable ------------------ 0
Inventory ------------------- 12,600 Account payable ------------ 18,300
Plant & equipment ------ -200,000 Capital stock --------------- 180,000
Total Asset ------------- 269,600 Retained earning ----------- 71,300
Total liab. & equity 269,600
Monthly budgeted expense
Wage and salary ------------------------------------------ 7,500
Fright out as a % age of sales----------------------------- 6%
Advertising expense ---------------------------------------- 6,000
Depreciation expense ------------------------------------ 2,000
Other expense as a % age of sales 4%
Budgeted sales
March (actual) 60,000 June 90,000
April 70,000 July 50,000
May 85,000
- Required minimum cash balance 90,000
- Minimum and inventory policy as a % age of next Mont's C/G.S 30%
- Cash sales is 20% while the remaining 80% is credit sales which will be collected in the next month.
- Gross profit rate is 40%
- 50% of purchase is paid in the month of purchase the remaining 50% is paid in the next month.
Required:
Question 1: Prepare the revenues budget.
Question 2: Prepare cash collection budget.
Question 3: Prepare the cost of goods sold budget.
Question 4: Prepare ending inventory budget.
Question 5: Prepare purchase budget.
Question 6: Prepare cash payment for purchase account.
Question 7: Prepare the operating expense (period cost) budget.
Question 8: Prepare the budgeted income statement.
Question 9: Prepare the cash budget.
Question 10: Prepare the budgeted balance sheet.
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