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Category > Accounting Posted 11 Aug 2017 My Price 14.00

Picanuy Corporation

The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods:

     
Current assets as of December 31:    
Cash $ 6,300
Accounts receivable $ 36,120
Inventory $ 10,780
Buildings and equipment, net $ 119,200
by Browse to Save">Accounts payable $ 32,730
Capital stock $ 100,000
Retained earnings $ 39,670

 

a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.)
b. Actual and budgeted sales data are as follows:

 

   
December (actual) $60,200
January $77,000
February $84,100
March $85,500
April $62,100

 

c.

Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales.
d. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold.
e.

One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory.
f.

Monthly expenses are as follows: commissions, $12,750; rent, $2,300; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $3,170 for the quarter and includes depreciation on new assets acquired during the quarter.
g. Equipment will be acquired for cash: $3,100 in January and $8,250 in February.
h.

Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow and repay in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The by Browse to Save">interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

by Browse to Save">

 

Required:
Using the data above:
1. by Browse to Save">Complete the following schedule: (Omit the "$" sign in your response.)

 

Schedule of Expected Cash Collections
  January February March Quarter
Cash sales $30,800 $ $ $
Credit sales 36,120      
 
Total collections $66,920 $ $ $
 

 

2.

Complete the following: (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Round the "Schedule of Expected Cash Disbursements Af?cAc‚¬" Merchandise Purchases" answers to 2 decimal places. Omit the "$" sign in your response.)

 

Merchandise Purchases Budget
  January   February March Quarter
Budgeted cost of goods sold $53,900 * $ $ $
Add desired ending inventory 11,774 Af?cAc‚¬      
 
Total needs 65,674        
Less beginning inventory 10,780        
 
Required purchases $54,894   $ $ $
 
*$77,000 sales AfA?" 70% = $53,900.
Af?cAc‚¬ $84,100 AfA?" 70% AfA?" 20% = $11,774.

 

Schedule of Expected Cash DisbursementsAf?cAc‚¬"Merchandise Purchases
    January   February   March   Quarter
December purchases   $ 32,730.00 * $   $   $ 32,730.00
January purchases   13,723.50   41,170.50       54,894.00
February purchases                
March purchases                
   
Total disbursements   $ 46,453.50   $   $   $
   
*Beginning balance of the accounts payable.

 

3. Complete the following schedule: (Omit the "$" sign in your response.)

 

Schedule of Expected Cash DisbursementsAf?cAc‚¬"Selling and Administrative Expenses
  January February March Quarter
Commissions $12,750 $ $ $
Rent 2,300      
Other expenses 6,160      
 
Total disbursements $21,210 $ $ $
 

 

4.

Complete the following cash budget: (Borrow and repay in increments of $1,000. Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

 

Picanuy Corporation
Cash Budget
  January February March Quarter
Cash balance, beginning $ 6,300.00 $ $ $
Add cash collections 66,920.00      
 
Total cash available 73,220.00      
 
Less cash disbursements:        
For inventory 46,453.50      
For operating expenses 21,210.00      
For equipment 3,100.00      
 
Total cash disbursements 70,763.50      
 
Excess (deficiency) of cash 2,456.50      
 
Financing:        
Borrowings        
Repayments        
Interest        
 
Total financing        
 
Cash balance, ending $ $ $ $
 

 

5.

Prepare an absorption costing income statement for the quarter ended March 31. (Input all amounts as positive values. Omit the "$" sign in your response.)

 

Picanuy Corporation
Income Statement
For the Quarter Ended March 31
    $
Cost of goods sold:    
  $  
     
 
 
     
     
 
     
Selling and administrative expenses:    
     
     
     
     
 
     
     
   
    $
   

 

6. Prepare a balance sheet as of March 31. (Be sure to list the assets and liabilities in order of their liquidity. Round your answers to 2 decimal places. Omit the "$" sign in your response.)

 

Picanuy Corporation
Balance Sheet
March 31
Assets
Current assets:    
    $
     
     
   
Total current assets    
     
   
Total assets   $
   
Liabilities and Stockholders' Equity
    $
     
Stockholders' equity:    
  $  
     
 
Total liabilities and stockholders' equity   $

 

Answers

Maurice Tutor
(5)
Status NEW Posted 11 Aug 2017 12:08 PM My Price 14.00

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