Reference no: EM132406680

Question

Kraft is a Wholesale distributor of artisan cheese and ice cream. The following information is available for April 2017. The beginning cash balance is $400,000.

Required: Prepare the following for April 2017 - Be sure to read the additional information below

a. Sales budget

b. Purchase Budget

c. Cash Budget

d. Budgeted Income Statement.

Estimated Sales

Cheese 160,000 hoops at $10 each

Ice Cream 240,000 gallons at $5 each

Estimated Costs

Cheese $ 8.00 per hoop

Ice Cream $ 2.00 per gallon

Desired inventories

Beginning Ending

Cheese 10,000 12,000

Ice Cream 4,000 5,000

Additional info:

· Beginning cash balance is $400,000

· Purchases of merchandise are paid 60% in the current month and 40% in the following month. Purchases totaled $1,800,000 in March and are estimated to be $2,000,000 in May.

· Employee wages and salaries are paid for in the current month. Employee Expenses for April totaled $156,000.

· Overhead expenses are paid in the next month. The accounts payable amount for these expenses from March is $80,000 and for May will be $90,000. April's overhead expenses total $80,000.

· Sales are on credit and are collected 70% in the current period and the remainder in the next period. March's sales were $3,000,000 and May's sales are estimated to be $3,200,000. Bad debts average 1% of sales. (Allowance for Bad Debts - non-cash )

· Selling and administrative expenses are paid monthly and total $450,000, including $40,000 of depreciation.

· All unit costs for April are the same as they were in March.