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ACC - Sanchez Co. & KASIK COMPANY Problem

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Question;Following information relates to Sanchez Co.a. Beginning cash balance on July 1: $40,000.b. Cash receipts from sales: 24% is collected in the month of sale, 50% in the next month, and 26% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,376,000, June (actual), $960,000, and July (budgeted), $1,120,000.c. Payments on merchandise purchases: 48% in the month of purchase and 52% in the month following purchase. Purchases amounts are: June (actual), $344,000, and July (budgeted), $600,000.d. Budgeted cash disbursements for salaries in July: $168,800.e. Budgeted depreciation expense for July: $9,600.f. Other cash expenses budgeted for July: $120,000.g. Accrued income taxes due in July: $80,000 (related to June).h. Bank loan interest due in July: $5,280.Additional Information:a. Cost of goods sold is 35% of sales.b. Inventory at the end of June is $64,000 and at the end of July is $272,000.c. Salaries payable on June 30 are $40,000 and are expected to be $32,000 on July 31.d. The equipment account balance is $1,280,000 on July 31. On June 30, the accumulated depreciation on equipment is $224,000.e. The $5,280 cash payment of interest represents the 1% monthly expense on a long-term bank loan of $528,000.f. Income taxes payable on July 31 are $151,312, and the income tax rate applicable to the company is 35%.g. The only other balance sheet accounts are: Common Stock, with a balance of $562,880 on June 30, and Retained Earnings, with a balance of $857,600 on June 30.Prepare a budgeted income statement for the month of July and a budgeted balance sheet for July 31. (Be sure to list the assets and liabilities in order of their liquidity. Input all amounts as positive values. Omit the "$" sign in your response.)SANCHEZ COMPANYBudgeted Income StatementFor The Month Ended July 31Kasik Co. budgeted the following cash receipts and cash disbursements for the first three months of next year.CashReceipts CashDisbursementsJanuary $ 526,000 $ 478,000February 403,500 365,000March 462,000 530,000According to a credit agreement with the company?s bank, Kasik promises to have a minimum cash balance of $10,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at an annual interest rate of 12%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company has a cash balance of $10,000 and a loan balance of $20,000 at January 1.Prepare monthly cash budgets for each of the first three months of next year. (Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)KASIK COMPANYCash BudgetFor January, February, and MarchJanuary February March

 

Paper#42130 | Written in 18-Jul-2015

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