Question - Jamie's Hat Shop sells hats with college logos on them; the hats sell for $22 each. This year, Jamie's expects to sell 350 hats in May, 300 in June, 400 in July, 800 in August, 1,040 in september, and 750 in October. On average, 25 percent of its customers purchase on credit . Jaime's allows those customers to pay for their purchases the month after they have made their purchases.

Prepare a sales budget for Jaime's Hat Shop for the third quarter of this year.

Question - Company policy is to plan to end each month with an ending inventory equal to 20 percent of the next month's projected sales. Jaime's pays $8 for each hat that it purchases. Jaime and his supplier have an arrangement that allows Jaim;es Hat Shop to pay for each purchase 60 days after the purchase.

Prepare a purchases budget for the third quarter of this year for Jaime's Hat Shop.

Question - Jamie's ended the second quarter for this year with 60 hats on hand.

Notice that Jaime's ended the second quarter with less than 20 percent of projected sales for July. What do you think accounts for the difference? How many hats should Jaime's purchase in July?

Question - Jaime's Hat Shop expects to incur the following expenses for each month of the third quarter of the year.

Rent (30% general and administrative, 70% selling) - $1200

Utilities (30% general and administrative, 70% selling) - $600

Advertising - $400    

Salaries (50% general and administrative, 50% selling) - $5000

Commissions (for each Hat sold) - 2

In January, Jaime's had prepared the rent for the whole year. Jaime plans to pay for all the other expenses in the month they occur.

Prepare a selling expenses budget for the third quarter of the year.

Prepare a general and administrative expenses budget for the third quarter of this year.

Question - Jaime's  Hat Shop ended June with a cash balance of $10,343.

Prepare a cash budget  for the third quarter of this year.

Prepare a projected income statement for the third quarter of this year.