Following information relates to Sanchez Co. Beginning cash balance on July 1: $
ID: 2587160 • Letter: F
Question
Following information relates to Sanchez Co. Beginning cash balance on July 1: $50,000. b Cash receipts from sales: 30% is collected in the month of sale. 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,720,000; June (actual) $1,200,000; and July (budgeted), $1,400,000. e. Payments on merchandise purchases: 60% in the month of purchase and 40% in the month following purchase. Purchases amounts are: June (actual), $430,000; and July (budgeted). 600,000. 4 Budgeted cash disbursements for salaries in July: $211,000 Budgeted depreciation expense for July: $12,000. t Other cash expenses budgeted for July: $150,000. a Accrued income tax due in July $80,000. h.Bank loan interest due in July: $6,600. Cost of goods sold is 44% of sales. Inventory at the end of June is $80,000 and at the end of July is 64,000 Salaries payable on June 30 are $50,000 and are expected to be $40,000 on July 31 d The equipment account balance is $1,600,000 on July 31. On June 30, the accumulated depreciation on equipment is 280,000 .. The $6,600 cash payment of interest represents the 1% monthly expense on a bank loan of $660,000. t Income tax payable on July 31 are $124,320, and the income tax rate applicable to the company is 30%. The only other statement of financial position accounts are Share Capital Ordinary, with a balance of $600,000 on June 30: and Retained Earnings, with a balance of $1,072.000 on June 30 Prepare a budgeted income statement for the month of July and a budgeted statement of financial position for July 31·(Be sure to list the assets and liabilities in order of their liquidity, Input all amounts as positive values. Omit the "$" sign in your response.) SANCHEZ COMPANY Budgeted Income Statement For The Month Ended July 31 otal ExpenseExplanation / Answer
SANCHEZ COMPANY Budgeted Income Statement For The Month Ended July 31 Sales $1,400,000 Cost of good sold = 44% of sales $616,000 Gross Profit $784,000 Operating Expenses Salaries expense ($40,000 + $211,000 - $50000) $201,000 Depreciation expense $12,000 Other cash expenses $150,000 Bank loan interest expense $6,600 Total Expenses $369,600 Income before taxes $414,400 Income tax expense $124,320 Net Income $290,080 SANCHEZ COMPANY Budgeted Balance Sheet As of July 31 ASSETS Cash (balancing figure) $434,400 Accounts Receivables = June sales (20% x $1,200,000)+July sales (70% x $1,400,000) $1,220,000 Inventory (Beg. $80,000 + Purchase $600,000 - Cogs $616,000 ) $64,000 Total current assets $1,718,400 Equipment $1,600,000 Less: Accumulated Dep. (280,000+12000) $292,000 $1,308,000 Total assets $3,026,400 LIABILITIES AND EQUITY LIABILITIES Accounts Payable (July Purchase $600,000 x 40%) $240,000.00 Salaries payable $40,000.00 Income taxes payable $124,320.00 Total current liabilities $404,320.00 Bank Loan Payable $660,000.00 $1,064,320.00 Stockholders’ equity Common stock $600,000.00 Retained earnings ($1072000+$290080) $1,362,080.00 $1,962,080.00 Total liabilities and equity $3,026,400.00