Case 9-30 Partial Answer

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Student Name: Class: Case 09-30 EARRINGS UNLIMITED Budgets April Requirement 1a. Sales budget: Budgeted sales in units Selling price per unit Total sales May June Quarter

65,000 100,000 50,000 $10 $650,000 Correct! Requirement 1b. Schedule of expected cash collections: February sales $26,000 March sales 280,000 April sales 130,000 May sales June sales Total cash collections $436,000 Correct! Requirement 1c. Merchandise purchases budget: Budgeted unit sales 65,000 100,000 Add desired ending inventory 40,000 Total needs 105,000 Less beginning inventory 26,000 Required purchases in units 79,000 Unit cost $4 Required dollar purchases $316,000 Correct! Requirement 1d. Budgeted cash disbursements for merchandise purchases: Accounts payable 100,000 April purchases 158,000 158,000 May purchases June purchases Total cash disbursements $258,000 Correct!

$2,150,000 Correct!

$1,996,000 Correct!

$804,000 Correct!

$820,000 Correct!

Student Name: Class: Case 09-30

Requirement 2: EARRINGS UNLIMITED Cash Budget For the Three Months Ending June 30 April $74,000 436,000 510,000 258,000 200,000 18,000 106,000 26,000 7,000 15,000 630,000 (120,000) 170,000 May June Quarter

Cash balance, beginning Add receipts from customers Total cash available Less disbursements: Merchandise purchases Advertising Rent Salaries Commissions (4% of sales) Utilities Equipment purchases Dividends paid Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, ending

2,070,000

197,000

$50,000 Correct!

$94,700 Correct!

Requirement 3: EARRINGS UNLIMITED Budgeted Income Statement For the Three Months Ending June 30 Sales in units Sales Variable expenses: Cost of goods sold Commissions Contribution margin Fixed expenses: Advertising Rent Salaries Utilities Insurance Depreciation Net operating income Less interest expense Net income

$154,700 Correct!

Student Name: Class: Case 09-30...
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