PROJECT A - Case 9-30

Student Name:
SALES BUDGET:
April
65,000
10
650,000

May
100,000
10
1,000,000

June
50,000
10
500,000

Quarter
215,000
10
2,150,000

SCHEDULE OF EXPECTED CASH COLLECTIONS:

April
May
February sales
260,000
10%
26,000
March sales
400,000
70/10% 280,000
40,000
April sales
650,000
70/10% 130,000
455,000
May sales
1,000,000
20/70%
200,000
June sales
500,000
20%
Total Cash Collections
436,000
695,000

June
65,000
700,000
100,000
865,000

Quarter
26,000
320,000
650,000
900,000
100,000
1,996,000

Budgeted unit sales

Selling price per unit
Total Sales

MERCHANDISE PURCHASES BUDGET:

Budgeted unit sales
Add desired ending inventory

Total needs
Less beginning inventory
Required purchases
Cost of purchases @ $4 per unit

40%

April
65,000
40,000
105,000
26,000
79,000
$316,000

May
100,000
20,000
120,000
40,000
80,000
$320,000

June
50,000
12,000
62,000
20,000
42,000
$168,000

BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:

April
May
June
Accounts payable
100,000
April purchases
158,000
158,000
May purchases
160,000
160,000
June purchases
84,000
Total cash payments
258,000
318,000
244,000

EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
April
May
June
Cash balance
74,000
50,000
50,000
Add collections from customers
436,000
695,000
865,000
Total cash available
510,000
745,000
915,000
Less Disbursements
Merchandise purchases
Advertising

258,000
200,000

318,000
200,000

244,000
200,000

Quarter
215,000
12,000
227,000
26,000
201,000
$804,000

Quarter
100,000
316,000
320,000
84,000
820,000

Quarter
74,000
1,996,000
2,070,000
820,000
600,000

Rent
Salaries
Commissions
Utilities
Equipment purchases
Dividends paid
Total Disbursements
Excess (deficiency) of receipts
over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending

18,000
106,000
26,000
7,000
15,000
630,000

18,000
106,000
40,000
7,000
16,000
705,000

18,000
106,000
20,000
7,000
40,000
635,000

54,000
318,000
86,000
21,000
56,000
15,000
1,970,000

(120,000)

40,000

280,000

100,000

170,000
170,000

10,000
10,000

(180,000)
(5,300)
(185,300)

180,000
(180,000)
(5,300)
(5,300)

50,000

50,000

94,700

94,700

EARRINGS UNLIMITED
BUDGETED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30
Sales
Variable expenses:
Cost of goods sold
Commissions
Contribution Margin
Fixed expenses:
Advertising
Rent
Salaries
Utilities
Insurance
Depreciation
Net operating income
Interest expense
Net income

2,150,000
860,000
86,000
600,000
54,000
318,000
21,000
9,000
42,000

946,000
1,204,000

1,044,000
160,000
(5,300)
154,700

EARRINGS UNLIMITED
BUDGETED BALANCE SHEET
JUNE 30
Assets:
Cash
Accounts receivable (see below)
Inventory
Prepaid insurance
Property and equipment, net
Total assets

94,700
500,000
48,000
12,000
964,000
1,618,700

Liabilities and Stockholders' Equity

Accounts payable, purchases
Dividends payable
Capital stock
Retained earnings (see below)
Total liabilities and stockholders' equity

84,000
15,000
800,000
719,700
1,618,700

Accounts receivable at June 30:

May sales x 10% x $10
June sales x 80% x $10
Total

100,000
400,000
500,000

Retained earnings at June 30:

Balance, March 31
Add net income
Total
Less dividends declared
Balance, June 30

580,000
154,700
734,700
15,000
719,700