Monthly selling and administrative expenses are budgeted as

Reference no: EM13579728

Nordic Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter.

a.	As of March 31 , the company%u2019s balance sheet showed the following account balances:


Cash	$	15,000
Accounts receivable		59,200
Inventory		16,920
Buildings and equipment (net)		234,000
Accounts payable			$	24,000
Capital stock				170,000
Retained earnings				131,120

	$	325,120	$	325,120

b.	Actual sales for March and budgeted sales for April%u2013July are as follows:


March (actual)	$74,000
April	$94,000
May	$104,000
June	$109,000
July	$64,000

c.	Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at March 31 are a result of March credit sales.
d.	The company%u2019s gross margin percentage is 40% of sales.
e.	Monthly selling and administrative expenses are budgeted as follows: salaries and wages, $12,000 per month; shipping, 6% of sales; advertising, $7,400 per month; other expenses, 4% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $6,000 for the quarter.
f.	Each month%u2019s ending inventory should equal 30% of the following month%u2019s cost of goods sold.
g.	Half of a month%u2019s inventory purchases are paid for in the month of purchase and half in the following month.
h.	Equipment purchases during the quarter will be as follows: April, $12,000; and May, $5,000.
i.	Dividends totaling $3,500 will be declared and paid in June.
j.	Management wants to maintain a minimum cash balance of $8,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The 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.

Required:
Using the data above, complete the following statements and schedules for the second quarter:
	Schedule of expected cash collections:

Reference no: EM13579728

Questions Cloud

Timberly construction negotiates a lump-sum purchase of : timberly construction negotiates a lump-sum purchase of several assets from a company that is going out of business.

Is there sufficient evidence to support the claim that : data from six students relating number of hours of preperation x and test score y yield a linear correlation

Assume that the land is sold on 1113 and that sanoma : padilla company purchased 80 of the common stock of sanoma company in the open marke on january 1 2010 paying 31000

The value of the linear correlation coefficient was found : using data collected from the fbi the number of registered automatic weapons and the murder rate were obtained for

Monthly selling and administrative expenses are budgeted as : nordic company a merchandising company prepares its master budget on a quarterly basis. the following data have been

Product a has a sales price of 10 per unit based on a : 1 jamesway corporation has two seperate divisions that operate as profit centers. the following information is

A committee of 3 people is formed from 6 women and 4 men : a committee of 3 people is formed from 6 women and 4 men. what is the cumulative probability function for the number of

Ue the data and stepwise regression to predict the cost : question the u.s. energy information administration releases figures in their publication monthly energy review about

If 2000 units remain unsold at the end of the month and : a business operated at 100 of capacity during its first month and incurred the following costs production costs 10000

User Account

All Pages

Monthly selling and administrative expenses are budgeted as

Reference no: EM13579728

Reference no: EM13579728

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

Do you believe that manufacturers of accounting software

Common relationships and other considerations

How a long-term asset is depreciated

Total expenses for january

Which of the following is not the step in accounting

Project profitability index

What are the components of cost-volume-profit cvp analysis

Activity variance for plane operating costs

Compare and contrast an income statement and a balance

What is the total rent due for the month

Cavanaugh construction specializes in designing and

The equipments salvage value is zero and doug uses

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT