ACC 505 Course Project 1
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ACC 505 Course Project 1

Course Number: ACC 505, Spring 2012

College/University: DeVry Houston

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PROJECT A - Case 9-30 Student Name: Emily Scarborough 1.a. SALES BUDGET: April 65,000 $10 $650,000 Budgeted unit sales Selling price per unit Total Sales 1.b.SCHEDULE OF EXPECTED CASH COLLECTIONS: April February sales 10% of $260k 26,000 March sales 70%, 10% of $400k 280,000 April sales 20%, 70%,10% of $650k 130,000 May sales 20%, 70% of $1,000k June sales 20% of $500k Total Cash Collections $436,000...

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A PROJECT - Case 9-30 Student Name: Emily Scarborough 1.a. SALES BUDGET: April 65,000 $10 $650,000 Budgeted unit sales Selling price per unit Total Sales 1.b.SCHEDULE OF EXPECTED CASH COLLECTIONS: April February sales 10% of $260k 26,000 March sales 70%, 10% of $400k 280,000 April sales 20%, 70%,10% of $650k 130,000 May sales 20%, 70% of $1,000k June sales 20% of $500k Total Cash Collections $436,000 1.c.MERCHANDISE PURCHASES BUDGET: April Budgeted unit sales 65,000 Add desired ending inventory 40% next months. 40,000 Total needs 105,000 Less beginning inventory 26,000 Required purchases 79,000 Cost of purchases @ $4 per unit $316,000 May 100,000 $10 $1,000,000 June 50,000 $10 $500,000 Quarter 215,000 $10 $2,150,000 June $695,000 65,000 700,000 100,000 $865,000 Quarter 26,000 320,000 650,000 900,000 100,000 $1,996,000 May 100,000 June 50,000 Quarter 215,000 20,000 120,000 40,000 80,000 $320,000 12,000 62,000 20,000 42,000 $168,000 12,000 227,000 26,000 201,000 $804,000 May 40,000 455,000 200,000 1.d. BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES: April May June Accounts payable 100,000 April purchases 158,000 158,000 May purchases 160,000 160,000 June purchases 84,000 Total cash payments $258,000 $318,000 $244,000 Quarter 100,000 316,000 320,000 84,000 $820,000 - 2. CASH BUDGET FOR THE THREE MONTHS ENDING JUNE 30 April May June 74,000 50,000 50,000 Cash balance 436,000 695,000 865,000 Add collections from customers Total cash available $510,000 $745,000 $915,000 Less Disbursements Merchandise purchases Advertising Rent Salaries Commissions Utilities Equipment purchases Dividends paid Total Disbursements 258,000 200,000 18,000 106,000 26,000 7,000 Quarter 74,000 1,996,000 $2,070,000 820,000 600,000 54,000 318,000 86,000 21,000 56,000 15,000 1,970,000 705,000 635,000 (120,000) 40,000 280,000 170,000 170,000 10,000 10,000 (180,000) (5,300) (185,300) 100,000 180,000 (180,000) (5,300) (5,300) 50,000 Cash balance, ending 244,000 200,000 18,000 106,000 20,000 7,000 40,000 15,000 630,000 Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest ($170k*1%*3)+(10k*1%*2) Total financing 318,000 200,000 18,000 106,000 40,000 7,000 16,000 50,000 94,700 194,700 3. EARRINGS UNLIMITED BUDGETED INCOME STATEMENT FOR THE THREE MONTHS ENDED JUNE 30 2,150,000 Sales Variable expenses: Cost of goods sold Commissions Contribution Margin Fixed expenses: Advertising ($200,000 x 3 mo.) Rent ($18,000 x 3 mo.) Salaries ($106,000 x 3 mo.) Utilities ($7,000 x 3 mo.) Insurance ($3,000 x 3 mo.) Depreciation ($14,000 x 3 mo.) Net operating income Interest expense Net income 860,000 86,000 600,000 54,000 318,000 21,000 9,000 42,000 946,000 1,204,000 1,044,000 160,000 5,300 154,700 4. EARRINGS UNLIMITED BUDGETED BALANCE SHEET JUNE 30 Assets: Cash (Cash Budget ending cash) Accounts receivable (see below) Inventory Prepaid insurance Property and equipment, net Total assets 94,700 500,000 48,000 12,000 964,000 1,618,700 Liabilities and Stockholders' Equity Accounts payable, purchases Dividends payable Capital stock Retained earnings (see below) Total liabilities and stockholders' equity 84,000 15,000 800,000 719,700 1,618,700 Accounts receivable at June 30: May sales $1,000,000 x 10% June sales $500,000 x 80% Total 100,000 400,000 500,000 Retained earnings at June 30: Balance, March 31 Add net income Total Less dividends declared Balance, June 30 580,000 154,700 734,700 15,000 719,700

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