Budgeted Income Statement of Cravat Sales Company
Case 9-23 1.
a.
Sales budget:
April
May
June
Quarter
Budgeted sales in units
35,000
45,000
60,000
140,000
Selling price per unit × $8 × $8 × $8 × $8
Total sales
$280,000
$360,000
$480,000
$1,120,000
b.
Schedule of expected cash collections:
February sales
$ 48,000
$ 48,000
March sales
112,000
$ 56,000
168,000
April sales
70,000
140,000
$ 70,000
280,000
May sales
90,000
180,000
270,000
June sales
120,000 120,000
Total cash collections
$230,000
$286,000
$370,000
$ 886,000
c.
Merchandise purchases budget:
Budgeted sales in units
35,000
45,000
60,000
140,000
Add budgeted ending inventory* 40,500 54,000 36,000 36,000
Total needs
75,500
99,000
96,000
176,000
Less beginning inventory 31,500 40,500 54,000 31,500
Required unit purchases 44,000
58,500
42,000
144,500
Unit cost × $5 × $5 × $5 × $5
Required dollar purchases
$220,000
$292,500
$210,000
$ 722,500
*90% of the next month’s sales in units.
d.
Budgeted cash disbursements for merchandise purchases:
April
May
June
Quarter
March purchases
$ 85,750
$ 85,750
April purchases
110,000
$110,000
220,000
May purchases
146,250
$146,250
292,500
June purchases
105,000 105,000
Total cash disbursements
$195,750
$256,250
$251,250
$ 703,250
2.
Cravat Sales Company
Cash Budget
For the Three Months Ending June 30
April
May
June
Quarter
Cash balance, beginning
$ 14,000
$ 10,250
$ 10,000
$ 14,000
Add receipts from customers (Part 1 b.) 230,000 286,000 370,000 886,000
Total cash available 244,000 296,250 380,000 900,000
Less
a.
Sales budget:
April
May
June
Quarter
Budgeted sales in units
35,000
45,000
60,000
140,000
Selling price per unit × $8 × $8 × $8 × $8
Total sales
$280,000
$360,000
$480,000
$1,120,000
b.
Schedule of expected cash collections:
February sales
$ 48,000
$ 48,000
March sales
112,000
$ 56,000
168,000
April sales
70,000
140,000
$ 70,000
280,000
May sales
90,000
180,000
270,000
June sales
120,000 120,000
Total cash collections
$230,000
$286,000
$370,000
$ 886,000
c.
Merchandise purchases budget:
Budgeted sales in units
35,000
45,000
60,000
140,000
Add budgeted ending inventory* 40,500 54,000 36,000 36,000
Total needs
75,500
99,000
96,000
176,000
Less beginning inventory 31,500 40,500 54,000 31,500
Required unit purchases 44,000
58,500
42,000
144,500
Unit cost × $5 × $5 × $5 × $5
Required dollar purchases
$220,000
$292,500
$210,000
$ 722,500
*90% of the next month’s sales in units.
d.
Budgeted cash disbursements for merchandise purchases:
April
May
June
Quarter
March purchases
$ 85,750
$ 85,750
April purchases
110,000
$110,000
220,000
May purchases
146,250
$146,250
292,500
June purchases
105,000 105,000
Total cash disbursements
$195,750
$256,250
$251,250
$ 703,250
2.
Cravat Sales Company
Cash Budget
For the Three Months Ending June 30
April
May
June
Quarter
Cash balance, beginning
$ 14,000
$ 10,250
$ 10,000
$ 14,000
Add receipts from customers (Part 1 b.) 230,000 286,000 370,000 886,000
Total cash available 244,000 296,250 380,000 900,000
Less