Please Please Please Help and Show All Work Please (Please do all parts) ezto.mh
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Please Please Please Help and Show All Work Please (Please do all parts)
ezto.mheducation.com/hm.tpx?todozc15Si ingleQuestionNo: 1.&postSubmissionView; = 13252707378067937&wid;=132527073921 95729&role-student;&pid;=23460604… . Award: 50.00 points You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget tor the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below The company sells many styles o earringS, but all are sold for the same price--$15 per pair. Actual sales of earrings tor the last three months and budgeted sales tor the next six months follow (in pairs of earrings) January (actual) February (actual) March (actual) April (budget) 22,200 June (budget) 28,200 July (budget) 42,200 August (budget) 67,200 September (budget) 52,200 32,200 30,200 27,200 102,200 The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $5.10 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase: the other half is paid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible Monthly operating expenses for the company are given below Variable 4% of sales Fixed $ 310,000 S 29,000 S 128,000 S 12,500 5 4,100 S 25,000 Rent Utilities Insurance 4:50 PM O Type here to search 3/15/2018Explanation / Answer
Required Budgets are as prepared below:
1a Earings unlimited Sales Budget For the quarter ended June 30 Month Particulars April May June Total Budgeted Unit sales 67,200 102,200 52,200 221,600 Sale Price 15 15 15 15 Budgeted sales 1,008,000 1,533,000 783,000 3,324,000 1b. Earings unlimited Schedule of expected Cash collections For the quarter ended June 30 Month Particulars April May June Total Beginning Accounts Receivable February sales (28,200*15*10%) 42,300 42,300 March sales (42,200*15*70%) 443,100 443,100 March sales (42,200*15*10%) 63,300 63,300 April Credit Sales 201,600 705,600 100,800 1,008,000 May Credit Sales 306,600 1,073,100 1,379,700 June Credit sales 156,600 156,600 Total collections 687,000 1,075,500 1,330,500 3,093,000 Account receivable for June Sale 626,400 Account receivable for May Sale 153,300 1c. Earings unlimited Merchandise Purchase Budget For the quarter ended June 30 Month Particulars April May June Total Budgeted Unit Sales 67,200 102,200 52,200 221,600 Add: Desired Ending merchandise inventory (40% of next month sales) 40,880 20,880 12,880 12,880 Total needs 108,080 123,080 65,080 234,480 Less: beginning merchandise inventory 26,880 40,880 20,880 26,880 Required purchase 81,200 82,200 44,200 207,600 Unit Cost 5.1 5.1 5.1 5.1 Required dollar purchases $414,120 $419,220 $225,420 $1,058,760 1d. Earings unlimited Schedule of expected Cash payments For the quarter ended June 30 Month Particulars April May June Total Beginning Accounts Payable (a) $111,000 $111,000 April Purchases (b) $207,060 $207,060 $414,120 May Purchases (c ) $209,610 $209,610 $419,220 June Purchases (d) $112,710 $112,710 Total payments (a+b+c+d) $318,060 $416,670 $322,320 $1,057,050 Earings unlimited Commission For the quarter ended June 30 Month Particulars April May June Total Budgeted Unit sales 67,200 102,200 52,200 221,600 Sale Price 15 15 15 15 Budgeted sales 1,008,000 1,533,000 783,000 3,324,000 Sales commisssions (4% of sales) 40,320 61,320 31,320 132,960 2 Earings unlimited Cash Budget For the quarter ended June 30 Month Particulars April May June Total Beginning Cash balance 85,000 61,870 158,380 85,000 Add: Collection from customers $687,000 $1,075,500 $1,330,500 $3,093,000 cash available for use $772,000 $1,137,370 $1,488,880 $3,178,000 Less: cash Disbursements Merchandise purchase $318,060 $416,670 $322,320 1,057,050 Advertising 310,000 310,000 310,000 930,000 Rent 29,000 29,000 29,000 87,000 Salaries 128,000 128,000 128,000 384,000 Commissions 40,320 61,320 31,320 132,960 Utilities 12,500 12,500 12,500 37,500 Equipment purchase 21,500 51,000 72,500 Dividend paid 23,250 23250 Total disbusrement 861,130 978,990 884,140 2,724,260 Cash surplus/Deficit -89,130 158,380 604,740 453,740 Financing Borrowing 151,000 151,000 Repayment -151,000 -151,000 Interest -3020 -3,020 Net cash from Financing 151,000 0 -154,020 -3,020 Budgeted ending cash balance 61,870 158,380 450,720 450,720 Earings Unlimited Budgeted Income Statement For the three month ended June 30 Particulars Amount ($) Amount ($) Sales 3,324,000 Less: Cost of goods sold (221,600*5.1) 1,130,160 Variable expenses: Commissions 132,960 Interest expense 3,020 Insurance (4,100*3) 12,300 148,280 Contribution Margin 2,045,560 Fixed Expenses: Advertising 930,000 Rent 87,000 Salaries 384,000 Depreciation (25,000*3) 75,000 Utilities 37,500 1,513,500 Net operating Income 532,060 Dividend Paid 23,250 Net Income 508,810 Earings Unlimited Budgeted balance Sheet Jun-30 Assets Cash 450,720 Accounts Receivable 779,700 Inventory (12,880*5.1) 65,688 Property and equipment Net (1060000+21,500+51,000-75,000) 1,057,500 Prepaid insurance (26,500-12,300) 14,200 Total assets 2,367,808 Liabilities and Stockholders' Equity Accounts Payable purchases 112,710 Dividend payable 23,250 Common Stock 1,020,000 Retained earnings (703,038+514,850) 1,211,848 Total liabilities and stockholders' equity 2,367,808