Question;Aztec Company sells its product for $160;per unit. Its actual and projected sales follow.;Units;Dollars;April (actual);7,000;$1,120,000;May (actual);3,200;512,000;June (budgeted);5,500;880,000;July (budgeted);6,000;960,000;August (budgeted);4,200;672,000;All sales are on;credit. Recent experience shows that 26% of credit sales is collected in;the month of the sale, 44% in the month after the sale, 24% in the second;month after the sale, and 6% proves to be uncollectible. The product?s;purchase price is $110 per unit. All purchases are payable within 15 days.;Thus, 60% of purchases made in a month is paid in that month and the other;40% is paid in the next month. The company has a policy to maintain an;ending monthly inventory of 20% of the next month?s unit sales plus a;safety stock of 50 units. The April 30 and May 31 actual inventory levels;are consistent with this policy. Selling and administrative expenses for;the year are $1,668,000 and are paid evenly throughout the year in cash.;The company?s minimum cash balance at month-end is $130,000. This minimum;is maintained, if necessary, by borrowing cash from the bank. If the;balance exceeds $130,000, the company repays as much of the loan as it can;without going below the minimum. This type of loan carries an annual 13%;interest rate. On May 31, the loan balance is $42,000, and the company?s;cash balance is $130,000.(Round final;answers to the nearest whole dollar.);rev: 11_19_2013_QC_40413;10_21_2014_QC_56990;1.;value:2.30 points;Required;1.;Prepare a table;that shows the computation of cash collections of its credit sales;(accounts receivable) in each of the months of June and July.;check my workreferences;2.;value:2.30 points;2.;Prepare a table;that shows the computation of budgeted ending inventories (in units) for;April, May, June, and July.;check my workreferences;3.;value:2.30 points;3.;Prepare the;merchandise purchases budget for May, June, and July. Report calculations;in units and then show the dollar amount of purchases for each month.;check my workreferences;4.;value:2.30 points;4.;Prepare a table;showing the computation of cash payments on product purchases for June and;July.;check my workreferences;5.;value:2.30 points;5.;Prepare a cash;budget for June and July, including any loan activity and interest expense.;Compute the loan balance at the end of each month.(Do not;round intermediate calculations.);Near;the end of 2013, the management of Dimsdale Sports Co., a merchandising;company, prepared the following estimated balance sheet for December 31;2013.;DIMSDALE SPORTS COMPANY;Estimated Balance Sheet;December 31, 2013;Assets;Cash;$;35,500;Accounts;receivable;520,000;Inventory;165,000;Total;current assets;720,500;Equipment;$;539,000;Less;accumulated depreciation;67,375;Equipment;net;471,625;Total;assets;$;1,192,125;Liabilities and Equity;Accounts;payable;$;365,000;Bank;loan payable;16,000;Taxes;payable (due 3/15/2014);90,000;Total;liabilities;$;471,000;Common;stock;474,000;Retained;earnings;247,125;Total;stockholders? equity;721,125;Total;liabilities and equity;$;1,192,125;To;prepare a master budget for January, February, and March of 2014, management;gathers the following information.;a.;Dimsdale;Sports? single product is purchased for $30 per unit and resold for $54 per;unit. The expected inventory level of 5,500 units on December 31, 2013, is;more than management?s desired level for 2014, which is 20% of the next;month?s expected sales (in units). Expected sales are: January, 7,000 units;February, 8,500 units, March, 11,250 units, and April, 10,500 units.;b.;Cash;sales and credit sales represent 25% and 75%, respectively, of total sales.;Of the credit sales, 63% is collected in the first month after the month of;sale and 37% in the second month after the month of sale. For the December;31, 2013, accounts receivable balance, $120,000 is collected in January and;the remaining $400,000 is collected in February.;c.;Merchandise;purchases are paid for as follows: 20% in the first month after the month of;purchase and 80% in the second month after the month of purchase. For the;December 31, 2013, accounts payable balance, $80,000 is paid in January and;the remaining $285,000 is paid in February.;d.;Sales;commissions equal to 20% of sales are paid each month. Sales salaries;(excluding commissions) are $90,000 per year.;e.;General;and administrative salaries are $144,000 per year. Maintenance expense equals;$2,000 per month and is paid in cash.;f.;Equipment;reported in the December 31, 2013, balance sheet was purchased in January;2013. It is being depreciated over eight years under the straight-line method;with no salvage value. The following amounts for new equipment purchases are;planned in the coming quarter: January, $37,000, February, $94,000, and;March, $29,000. This equipment will be depreciated under the straight-line;method over eight years with no salvage value. A full month?s depreciation is;taken for the month in which equipment is purchased.;g.;The;company plans to acquire land at the end of March at a cost of $140,000;which will be paid with cash on the last day of the month.;h.;Dimsdale;Sports has a working arrangement with its bank to obtain additional loans as;needed. The interest rate is 12% per year, and interest is paid at each;month-end based on the beginning balance. Partial or full payments on these;loans can be made on the last day of the month. The company has agreed to;maintain a minimum ending cash balance of $19,740 in each month.;i.;The;income tax rate for the company is 37%. Income taxes on the first quarter?s;income will not be paid until April 15.;Required;Prepare;a master budget for each of the first three months of 2014, include the;following component budgets;rev: 04_30_2014_QC_49073, 07_19_2014_QC_51562;6.;value:2.30 points;1.;Monthly;sales budgets.;check my workreferencesebook;resources;7.;value:2.30 points;2.;Monthly;merchandise purchases budgets.;check my workreferencesebook;resources;8.;value:2.30 points;3.;Monthly;selling expense budgets.;check my workreferencesebook;resources;9.;value:2.30 points;4.;Monthly;general and administrative expense budgets.;rev: 04_30_2014_QC_49073;check my workreferencesebook;resources;10.;value:2.30 points;5.;Monthly;capital expenditures budgets.;check my workreferencesebook;resources;11.;value:2.30 points;6.;Monthly;cash budgets.;rev: 01_20_2014_QC_43790;check my workreferencesebook;resources;12.;value:2.30 points;7.;Budgeted;income statement for the entire first quarter (not for each month).;rev: 07_19_2014_QC_51562;check my workreferencesebook;resources;13.;value:2.40 points;8.;Budgeted;balance sheet as of March 31, 2014.
Paper#47724 | Written in 18-Jul-2015Price : $30