Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total cash receipts
$
180,000
$
330,000
$
210,000
$
230,000
Total cash disbursements
$
260,000
$
230,000
$
220,000
$
240,000
The company's beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.
Required:
Prepare the company's cash budget for the upcoming fiscal year. (Show deficiencies, repayments, interest, and total financing preceded by a minus sign when appropriate. Enter all other amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Garden Depot
Cash Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
Cash balance, beginning
$
20,000
$
10,000
$
35,800
$
25,800
$
20,000
Total cash receipts
180,000
330,000
210,000
230,000
950,000
Total cash available
200,000
340,000
245,800
255,800
970,000
Less total cash disbursements
260,000
230,000
220,000
240,000
950,000
Excess (deficiency) of cash available over disbursements
Since the deficiency of cash available over disbursements is $60,000, the company must borrow $70,000 to maintain the desired ending cash balance of $10,000.
Interest:
$70,000 × 3% × 2 = $4,200.
Question 8:Score 0.28/4
Your response
Correct response
Exercise 9-8 Budgeted Income Statement [LO9]
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Budgeted unit sales
460
Selling price per unit
$
1,950
Cost per unit
$
1,575
Variable selling and administrative expenses (per unit)
$
75
Fixed selling and administrative expenses (per year)
$
105,000
Interest expense for the year
$
14,000
Required:
Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts as positive values. Omit the "$" sign in your response.)
Gig Harbor Boating
Budgeted Income Statement
Interest expense (0%)
$
1 (0%)
Selling and administrative expenses (0%)
1 (0%)
Gross profit (7%)
1 (0%)
Notes payable (0%)
1 (0%)
Net operating loss (0%)
1 (0%)
Notes payable (0%)
1 (0%)
Net loss (0%)
$
1 (0%)
Exercise 9-8 Budgeted Income Statement [LO9]
Gig Harbor Boating is the wholesale distributor of a small recreational catamaran sailboat. Management has prepared the following summary data to use in its annual budgeting process:
Budgeted unit sales
460
Selling price per unit
$
1,950
Cost per unit
$
1,575
Variable selling and administrative expenses (per unit)
$
75
Fixed selling and administrative expenses (per year)
$
105,000
Interest expense for the year
$
14,000
Required:
Use the absorption costing income statement method, prepare the company's budgeted income statement. (Input all amounts as positive values. Omit the "$" sign in your response.)
Cost of goods sold (460 units × $1,575 per unit) = $724,500
Selling and administrative expenses (460 units × $75 per unit) + $105,000 = $139,500.
Question 9:Score 0.38/4
Your response
Correct response
Exercise 9-9 Budgeted Balance Sheet [LO10]
The management of Mecca Copy, a photocopying center located on University Avenue, has compiled the following data to use in preparing its budgeted balance sheet for next year:
Ending
Balances
Cash
?
Accounts receivable
$
8,100
Supplies inventory
$
3,200
Equipment
$
34,000
Accumulated depreciation
$
16,000
Accounts payable
$
1,800
Common stock
$
5,000
Retained earnings
?
The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to be $4,800.
Required:
Prepare the company's budgeted balance sheet. (Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)
