Assignment
Quagmire Inc. has prepared the following sales budget for the quarter of April, May and June:
|
Sales Budget
|
|
April
|
May
|
June
|
Total
|
|
Sales in units
|
12600
|
16800
|
14400
|
43800
|
|
Selling price per unit
|
x $60
|
x $60
|
x $60
|
|
|
Sales revenue
|
$756000
|
$1008000
|
$864000
|
$2628000
|
All of the sales are on credit.
Quagmire collects from customers as follows:
45% of sales in the month of sale
25% in the month following the sale, and
30% in the second month following the sale.
|
Cash receipts budget
|
|
April
|
May
|
June
|
Total
|
|
Collect from current sales
|
340200
|
453600
|
388800
|
1182600
|
|
Collect from last month
|
225000
|
189000
|
252000
|
666000
|
|
Collect from 2 mos. Prior
|
248400
|
270000
|
226800
|
745200
|
|
Cash receipts
|
$ 813600
|
$ 912600
|
$ 867600
|
$ 2593800
|
Quagmire expects cost of goods sold to be 40% of sales.
They keep 10% of next months expected cost of goods sold in ending inventory. Below are budgeted purchases of inventory.
All purchases are paid for in the SAME month as the purchase.
|
Purchases Budget
|
|
|
|
|
|
|
April
|
May
|
June
|
Total
|
|
Budgeted cost of goods sold
|
302400
|
403200
|
345600
|
1051200
|
|
plus desired ending inventory
|
40320
|
34560
|
27360
|
27360
|
|
Total needs
|
342720
|
437760
|
372960
|
1078560
|
|
less beginning inventory
|
(30240)
|
(40320)
|
(34560)
|
(30240)
|
|
Cost of purchases
|
312480
|
397440
|
338400
|
1048320
|
Below is the budget for variable and fixed selling and administrative expenses.
Selling and admin expenses are paid in the month AFTER they are incurred.
Fixed expenses include depreciation of 17100 each month.
|
Sales and Admin Budget
|
|
April
|
May
|
June
|
Total
|
|
Variable S&A expenses
|
75600
|
100800
|
86400
|
262800
|
|
Fixed S&A (including depreciation)
|
171000
|
171000
|
171000
|
513000
|
Quagmire has $185000 of cash on hand at he beginning of May.
Prepare a cash budget for May and June. (Use excel so that multiple attempts are easier.)
Compute the beginning balance in cash for June.
Compute the ending balance in cash for June.