Peyton department store_master budget | Accounting homework help

Developing a Master Budget
for a Merchandising Organization
Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2010.

PEYTON DEPARTMENT STORE
Balance Sheet
March 31, 2010

Assets

Liabilities and Stockholders’ Equity

Cash

$2,000

Accounts payable

$26,000

Accounts receivable

25,000

Dividends payable

17,000

Inventory

30,000

Rent payable

1,000

Prepaid Insurance

2,000

Stockholders’ equity

40,000

Fixtures

25,000

   

Total assets

$84,000

Total liabilities and equity

$84,000

Actual and forecasted sales for selected months in 2010 are as follows:

Month

Sales Revenue

January

$70,000

February

50,000

March

40,000

April

50,000

May

60,000

June

70,000

July

90,000

August

80,000

Monthly operating expenses are as follows:

Wages and salaries

$26,000

Depreciation

100

Utilities

1,000

Rent

1,000

 

Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter.

 Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months.

 Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month’s sales. Purchases during any given month are paid in full during the following month.

All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter.

 Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $2,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.

 

(a) Prepare a purchases budget for each month of the second quarter ending June 30, 2010.

Peyton Department Store
Monthly Purchase Budget
Quarter Ending June 30, 2010

 

April

May

June

Total

Budgeted purchases

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(b) Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2010. Do not include borrowings.

Peyton Department Store
Schedule of Monthly Cash Receipts
Quarter Ending June 30, 2010

 

April

May

June

Total

Total cash receipts

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

 

(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2010. Do not include repayments of borrowings.

Peyton Department Store
Schedule of Monthly Cash Disbursements
Quarter Ending June 30, 2010

 

April

May

June

Total

Total cash disbursements

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(d) Prepare a cash budget for each month of the second quarter ending June 30, 2010. Include budgeted borrowings and repayments.

Peyton Department Store
Monthly Cash Budget
Quarter Ending June 30, 2010

 

April

May

June

Total

Cash balance, beginning

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

Receipts

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Disbursements

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Excess receipts over disb.

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Balance before borrowings

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Borrowings

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Loan repayments

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Cash balance, ending

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

 

 

(e) Prepare an income statement for each month of the second quarter ending June 30, 2010.

Peyton Department Store
Budgeted Monthly Income Statements
Quarter Ending June 30, 2010

 

April

May

June

Total

Sales

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

Cost of sales

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Gross profit

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Operating expenses:

       

Wages and salaries

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Depreciation

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Utilities

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Rent

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Insurance

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Interest

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Total expenses

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Net income

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(f) Prepare a budgeted balance sheet as of June 30, 2010.

Peyton Department Store
Budgeted Balance Sheet
June 30, 2010

Assets

Liabilities and Equity

 

Cash

$Answer[removed]

Merchandise payable

$Answer[removed]

 

Accounts receivable

Answer[removed]

Dividend payable

Answer[removed]

 

Inventory

Answer[removed]

Rent payable

Answer[removed]

 

Prepaid insurance

Answer[removed]

Loans payable

Answer[removed]

 

Fixtures

Answer[removed]

Interest payable

Answer[removed]

 

Total assets

$Answer[removed]

Stockholders’ equity

Answer[removed]

 
   

Total liab. & equity

$Answer[removed]

 

 

 Developing a Master Budget

for a Merchandising Organization
Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2010.

PEYTON DEPARTMENT STORE
Balance Sheet
March 31, 2010

Assets

Liabilities and Stockholders’ Equity

Cash

$2,000

Accounts payable

$26,000

Accounts receivable

25,000

Dividends payable

17,000

Inventory

30,000

Rent payable

1,000

Prepaid Insurance

2,000

Stockholders’ equity

40,000

Fixtures

25,000

   

Total assets

$84,000

Total liabilities and equity

$84,000

Actual and forecasted sales for selected months in 2010 are as follows:

Month

Sales Revenue

January

$70,000

February

50,000

March

40,000

April

50,000

May

60,000

June

70,000

July

90,000

August

80,000

Monthly operating expenses are as follows:

Wages and salaries

$26,000

Depreciation

100

Utilities

1,000

Rent

1,000

 

Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter.

 Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months.

 Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month’s sales. Purchases during any given month are paid in full during the following month.

All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter.

 Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $2,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.

 

(a) Prepare a purchases budget for each month of the second quarter ending June 30, 2010.

Peyton Department Store
Monthly Purchase Budget
Quarter Ending June 30, 2010

 

April

May

June

Total

Budgeted purchases

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(b) Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2010. Do not include borrowings.

Peyton Department Store
Schedule of Monthly Cash Receipts
Quarter Ending June 30, 2010

 

April

May

June

Total

Total cash receipts

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

 

(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2010. Do not include repayments of borrowings.

Peyton Department Store
Schedule of Monthly Cash Disbursements
Quarter Ending June 30, 2010

 

April

May

June

Total

Total cash disbursements

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(d) Prepare a cash budget for each month of the second quarter ending June 30, 2010. Include budgeted borrowings and repayments.

Peyton Department Store
Monthly Cash Budget
Quarter Ending June 30, 2010

 

April

May

June

Total

Cash balance, beginning

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

Receipts

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Disbursements

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Excess receipts over disb.

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Balance before borrowings

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Borrowings

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Loan repayments

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Cash balance, ending

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

 

 

(e) Prepare an income statement for each month of the second quarter ending June 30, 2010.

Peyton Department Store
Budgeted Monthly Income Statements
Quarter Ending June 30, 2010

 

April

May

June

Total

Sales

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

Cost of sales

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Gross profit

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Operating expenses:

       

Wages and salaries

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Depreciation

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Utilities

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Rent

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Insurance

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Interest

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Total expenses

Answer[removed]

Answer[removed]

Answer[removed]

Answer[removed]

Net income

$Answer[removed]

$Answer[removed]

$Answer[removed]

$Answer[removed]

(f) Prepare a budgeted balance sheet as of June 30, 2010.

Peyton Department Store
Budgeted Balance Sheet
June 30, 2010

Assets

Liabilities and Equity

 

Cash

$Answer[removed]

Merchandise payable

$Answer[removed]

 

Accounts receivable

Answer[removed]

Dividend payable

Answer[removed]

 

Inventory

Answer[removed]

Rent payable

Answer[removed]

 

Prepaid insurance

Answer[removed]

Loans payable

Answer[removed]

 

Fixtures

Answer[removed]

Interest payable

Answer[removed]

 

Total assets

$Answer[removed]

Stockholders’ equity

Answer[removed]

 
   

Total liab. & equity

$Answer[removed]

 

 

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