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Category > Accounting Posted 25 Sep 2017 My Price 10.00

Phototec, Inc.

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc. Balance Sheet May 31
Assets
Cash	$	9,000
Accounts receivable		85,000
Inventory		38,000
Buildings and equipment, net of depreciation		630,000

Total assets	$	762,000

Liabilities and Stockholders' Equity
Accounts payable	$	109,000
Note payable		28,000
Capital stock		550,000
Retained earnings		75,000

Total liabilities and stockholders' equity	$	762,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.	Sales are budgeted at $390,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.
b.	Purchases of inventory are expected to total $300,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
c.	The June 30 inventory balance is budgeted at $30,000.
d.	Selling and administrative expenses for June are budgeted at $66,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,300 for the month.
e.	The note payable on the May 31 balance sheet will be paid during June. The company’s interest expense for June (on all borrowing) will be $900, which will be paid in cash.
f.	New warehouse equipment costing $8,000 will be purchased for cash during June.
g.	During June, the company will borrow $31,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:
1a.	Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases.

Schedule of Expected Cash Collections
Cash sales-June	$ 390,000
Collections on accounts receivable:
May 31 balance	85,000
June	168,000

Total cash receipts	$ 253,000

Schedule of Expected Cash Disbursements
May 31 accounts payable balance	$ 109,000
June purchases	74,100

Total cash payments	$ 183,100

1b.

Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign.)

Phototec, Inc. Cash Budget For the Month of June
Cash balance, beginning	$ 107,000
Add receipts from customers	72,000

Total cash available	179,000

Less disbursements:
Purchase of inventory	74,100
Selling and administrative expenses	49,000
Purchases of equipment	9,000

Total cash disbursements	138,000

Excess of receipts over disbursements	41,000

Financing:
Borrowings-note	18,000
Repayments-note	15,000
Interest	500

Total financing	33,500

Cash balance, ending	$ 7,500

2.	Prepare a budgeted income statement for June. (Input all amounts as positive values.)

Phototec, Inc. Budgeted Income Statement For the Month of June
Sales		$ 250,000
Cost of goods sold:
Beginning inventory	$
Purchases

Goods available for sale
Ending inventory

Cost of goods sold		190,000

Gross margin		60,000
Selling and administrative expenses		53,000

Net operating income		7,000
Interest expense		500

Net income		$ 6,500

3.	Prepare a budgeted balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity.)

Phototec, Inc. Budgeted Balance Sheet June 30
Assets
Cash	$ 8,000
Accounts receivable	95,000
Inventory	40,000
Buildings and equipment, net of depreciation	507,000

Total assets	$ 649,500


Liabilities and Stockholders' Equity
Accounts payable	$ 120,000
Note payable	18,000
Capital stock	420,000
Retained earnings	91,500

Total liabilities and equity	$ 649,500

, Inc. Balance Sheet May 31
Assets
Cash	$	9,000
Accounts receivable		85,000
Inventory		38,000
Buildings and equipment, net of depreciation		630,000

Total assets	$	762,000

Liabilities and Stockholders' Equity
Accounts payable	$	109,000
Note payable		28,000
Capital stock		550,000
Retained earnings		75,000

Total liabilities and stockholders' equity	$	762,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.	Sales are budgeted at $390,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.
b.	Purchases of inventory are expected to total $300,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
c.	The June 30 inventory balance is budgeted at $30,000.
d.	Selling and administrative expenses for June are budgeted at $66,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,300 for the month.
e.	The note payable on the May 31 balance sheet will be paid during June. The company’s interest expense for June (on all borrowing) will be $900, which will be paid in cash.
f.	New warehouse equipment costing $8,000 will be purchased for cash during June.
g.	During June, the company will borrow $31,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc. Balance Sheet May 31
Assets
Cash	$	9,000
Accounts receivable		85,000
Inventory		38,000
Buildings and equipment, net of depreciation		630,000

Total assets	$	762,000

Liabilities and Stockholders' Equity
Accounts payable	$	109,000
Note payable		28,000
Capital stock		550,000
Retained earnings		75,000

Total liabilities and stockholders' equity	$	762,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.	Sales are budgeted at $390,000 for June. Of these sales, $75,000 will be for cash; the remainder will be credit sales. One-half of a month’s credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.
b.	Purchases of inventory are expected to total $300,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
c.	The June 30 inventory balance is budgeted at $30,000.
d.	Selling and administrative expenses for June are budgeted at $66,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,300 for the month.
e.	The note payable on the May 31 balance sheet will be paid during June. The company’s interest expense for June (on all borrowing) will be $900, which will be paid in cash.
f.	New warehouse equipment costing $8,000 will be purchased for cash during June.
g.	During June, the company will borrow $31,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:
1a.	Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases.

Schedule of Expected Cash Collections
Cash sales-June	$ 390,000
Collections on accounts receivable:
May 31 balance	85,000
June	168,000

Total cash receipts	$ 253,000

Schedule of Expected Cash Disbursements
May 31 accounts payable balance	$ 109,000
June purchases	74,100

Total cash payments	$ 183,100

1b.

Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign.)

Phototec, Inc. Cash Budget For the Month of June
Cash balance, beginning	$ 107,000
Add receipts from customers	72,000

Total cash available	179,000

Less disbursements:
Purchase of inventory	74,100
Selling and administrative expenses	49,000
Purchases of equipment	9,000

Total cash disbursements	138,000

Excess of receipts over disbursements	41,000

Financing:
Borrowings-note	18,000
Repayments-note	15,000
Interest	500

Total financing	33,500

Cash balance, ending	$ 7,500

2.	Prepare a budgeted income statement for June. (Input all amounts as positive values.)

Phototec, Inc. Budgeted Income Statement For the Month of June
Sales		$ 250,000
Cost of goods sold:
Beginning inventory	$
Purchases

Goods available for sale
Ending inventory

Cost of goods sold		190,000

Gross margin		60,000
Selling and administrative expenses		53,000

Net operating income		7,000
Interest expense		500

Net income		$ 6,500

3.	Prepare a budgeted balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity.)

Phototec, Inc. Budgeted Balance Sheet June 30
Assets
Cash	$ 8,000
Accounts receivable	95,000
Inventory	40,000
Buildings and equipment, net of depreciation	507,000

Total assets	$ 649,500


Liabilities and Stockholders' Equity
Accounts payable	$ 120,000
Note payable	18,000
Capital stock	420,000
Retained earnings	91,500

Total liabilities and equity	$ 649,500

11,250

75,000

37,500

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Status NEW Posted 25 Sep 2017 09:09 PM My Price 10.00

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