I need detailed help with steps and answer, I got 77,600 for borrowing for January but this was marked wrong, also I got 30,000 for beginning cash balance for February which was marked wrong, and beginning cash balance for March of 44,515 which was marked wrong as well. Next, for March I got Repayments of (77,600) for March marked wrong and (2,328) for interest marked wrong.
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a.
As of December 31 (the end of the prior quarter), the companyAc€?cs general ledger showed the following account balances: Cash $ 45,000 Accounts receivable 204,000 Inventory 58,500 Buildings and equipment (net) 355,000 Accounts payable $ 86,625 Common stock 500,000 Retained earnings 75,875 $ 662,500 $ 662,500 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) $255,000 January $390,000 February $587,000 March $301,000 April $198,000 c.
Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The companyAc€?cs gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e.
Monthly expenses are budgeted as follows: salaries and wages, $20,000 per month: advertising, $60,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,900 for the quarter. f. Each monthAc€?cs ending inventory should equal 25% of the following monthAc€?cs cost of goods sold. g.
One-half of a monthAc€?cs inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h.
During February, the company will purchase a new copy machine for $1,500 cash. During March, other equipment will be purchased for cash at a cost of $72,500. i. During January, the company will declare and pay $45,000 in cash dividends. j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
REQUIRED : PREPARE A CASH BUDGET : (Cash deficiency, repayments and interest should be indicated by a minus sign.)