PROJECT A - Case 9-30

Student Name: Leiza L Martin

SALES BUDGET:
April May June Quarter
Budgeted unit sales 65,000 100,000 50,000 215,000
Selling price per unit $10 $10 $10 $10
Total Sales $ 650,000 $ 1,000,000 $ 500,000 $ 2,150,000

SCHEDULE OF EXPECTED CASH COLLECTIONS:

April May June Quarter
February sales (10%) $ 26,000 $ 26,000
March sales (70%) next (10%) 280,000 $ 40,000 320,000
April sales 130,000 455,000 $ 65,000 650,000
May sales 200,000 700,000 900,000
June sales 100,000 100,000
Total Cash Collections $ 436,000 $ 695,000 $ 865,000 $ 1,996,000

MERCHANDISE PURCHASES BUDGET:

April May June Quarter
Budgeted unit sales 65,000 100,000 50,000 215,000
Add desired ending inventory
(40% of the next month's unit) 40,000 20,000 12,000 72,000
Total needs 105,000 120,000 62,000 287,000
Less beginning inventory 26,000 40,000 20,000 86,000
Required purchases 79,000 80,000 42,000 201,000
Cost of purchases @ $4 per unit $316,000 $320,000 $168,000 $804,000

BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:

April May June Quarter
Accounts payable $ 100,000 $100,000
April purchases 158,000 $ 158,000 316,000
May purchases 160,000 $ 160,000 320,000
June purchases 84,000 84,000
Total cash payments $ 258,000 $ 318,000 $ 244,000 $ 820,000

EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
April May June Quarter
Cash balance $ 74,000 $ 50,000 $ 50,000 $ 74,000
Add collections from customers 436,000 695,000 865,000 1,996,000
Total cash available $ 510,000 $ 745,000 $ 915,000 $ 2,070,000
Less Disbursements
Merchandise purchases $ 258,000 $ 318,000 $ 244,000 $ 820,000
Advertising 200,000 200,000 200,000 600,000
Rent 18,000 18,000 18,000 54,000
Salaries 106,000 106,000 106,000 318,000
Commissions 26,000 40,000 20,000 86,000
Utilities 7,000 7,000 7,000 21,000
Equipment purchases 16,000 40,000 56,000
Dividends paid 15,000 0 0 15,000
Total Disbursements $ 630,000 $ 705,000 $ 635,000 $ 1,970,000

Excess (deficiency) of receipts

over disbursements $ (120,000) $ 40,000 $ 280,000 $ 100,000
Financing:
Borrowings $ 170,000 $ 10,000 0 $ 180,000
Repayments $ (180,000) (180,000)
Interest (5,300) (5,300)
Total financing $ 170,000 $ 10,000 $ (185,300) $ (5,300)

Cash balance, ending $ 50,000 $ 50,000 $ 94,700 $ 94,700

EARRINGS UNLIMITED
BUDGETED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30

Sales $ 2,150,000
Variable expenses:
Cost of goods sold $ 860,000
Commissions $ 86,000 $ 946,000
Contribution Margin $ 1,204,000
Fixed expenses:
Advertising $ 600,000
Rent $ 54,000
Salaries $ 318,000
Utilities $ 21,000
Insurance $ 9,000
Depreciation $ 42,000 $ 1,044,000
Net operating income $ 160,000
Interest expense $ (5,300)
Net income $ 154,700

EARRINGS UNLIMITED
BUDGETED BALANCE SHEET
JUNE 30

Assets:
Cash $ 94,700
Accounts receivable (see below) $ 500,000
Inventory $ 48,000
Prepaid insurance $ 12,000
Property and equipment, net $ 964,000
Total assets $ 1,618,700

Liabilities and Stockholders' Equity

Accounts payable, purchases $ 84,000

Dividends payable $ 15,000
Capital stock $ 800,000
Retained earnings (see below) $ 719,700
Total liabilities and stockholders' equity $ 1,618,700

Accounts receivable at June 30:

May sales x 10% $ 100,000
June sales x 80% $ 400,000
Total $ 500,000

Retained earnings at June 30:

Balance, March 31 $ 580,000
Add net income $ 154,700
Total $ 734,700
Less dividends declared $ 15,000
Balance, June 30 $ 719,700
PROJECT A - Case 9-30
Student Name: Leiza L Martin

SALES BUDGET:
April May June Quarter
Budgeted unit sales 65,000 100,000 50,000 ###
Selling price per unit $10 $10 $10 $10
Total Sales ### ### $ 500,000 ###

SCHEDULE OF EXPECTED CA
April May June Quarter
February sales (10%) ### ###
March sales (70%) nex ### $40,000 ###
April sales ### 455,000 $ 65,000 ###
May sales 200,000 700,000 ###
June sales 100,000 ###
Total Cash Collection ### ### $ 865,000 ###

MERCHANDISE PUR
April May June Quarter
Budgeted unit sales 65,000 100,000 50,000 ###
Add desired ending inventory
(40% of the next month40,000 20,000 12,000 72,000
Total needs ### 120,000 62,000 ###
Less beginning invent 26,000 40,000 20,000 86,000
Required purchases 79,000 80,000 42,000 ###
Cost of purchases @ $ ### ### $168,000 ###

BUDGETED CASH DISBURSE

April May June Quarter
Accounts payable ### ###
April purchases ### ### ###
May purchases 160,000 $ 160,000 ###
June purchases 84,000 84,000
Total cash payments ### ### $ 244,000 ###

EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
April May June Quarter
Cash balance ### $50,000 $ 50,000 ###
Add collections from ### 695,000 865,000 ###
Total cash available ### 745,000 915,000 ###
Less Disbursements
Merchandise purcha ### 318,000 244,000 ###
Advertising ### 200,000 200,000 ###
Rent 18,000 18,000 18,000 54,000
Salaries ### 106,000 106,000 ###
Commissions 26,000 40,000 20,000 86,000
Utilities 7,000 7,000 7,000 21,000
Equipment purchases 16,000 40,000 56,000
Dividends paid 15,000 0 0 15,000
Total Disbursements ### 705,000 635,000 ###

Excess (deficiency) of receipts

over disbursements ### 40,000 280,000 ###
Financing:
Borrowings ### 10,000 0 ###
Repayments (180,000) ###
Interest (5,300) (5,300)
Total financing ### 10,000 (185,300) (5,300)

Cash balance, ending 50,000 50,000 94,700 94,700

EARRINGS UNLIMITED
BUDGETED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30

Sales 2,150,000
Variable expenses:
Cost of goods sold 860,000
Commissions 86,000 946,000
Contribution Margin 1,204,000
Fixed expenses:
Advertising 600,000
Rent 54,000
Salaries 318,000
Utilities 21,000
Insurance 9,000
Depreciation 42,000 1,044,000
Net operating income 160,000
Interest expense (5,300)
Net income 154,700

EARRINGS UNLIMITED
BUDGETED BALANCE SHEET
JUNE 30

Assets:

Cash 94,700
Accounts receivable (see below) 500,000
Inventory 48,000
Prepaid insurance 12,000
Property and equipment, net 964,000
Total assets 1,618,700

Liabilities and Stock

Accounts payable, purchases 84,000

Dividends payable 15,000
Capital stock 800,000
Retained earnings (see below) 719,700
Total liabilities an 1,618,700

Accounts receivable
May sales x 10% 100,000
June sales x 80% 400,000
Total 500,000

Retained earnings at
Balance, March 31 580,000
Add net income 154,700
Total 734,700
Less dividends declared 15,000
Balance, June 30 719,700