Lebo_Excel_Problem_Set_Solutoin - Lebo&TCo I T R...

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Lebo & Co. Instructions: January (Actual) 20,000 April (Budgeted) February (Actual) 26,000 May (Budgeted) March (Actual) 40,000 June (Budgeted) Variable: Sales Commisions 10% Fixed: Advertising $150,000 Rent $15,000 Salaries $100,000 Utilities $8,000 Insurance $4,000 Depreciation $15,000 You have just been hired as a new management trainee by Lebo & Co., a shopping malls across the country. In the past, the company has done ver year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare com to show management the benefits that can be gained from an integrated accounting and other areas to gather the information assembled below. The company sells many styles of bracelets, but all are sold for the same three months and budgeted sales for the next six months follow (in brace The concentration of sales before and during May is due to Mother’s Day. month to supply 50% of the bracelets sold in the following month. Suppliers are paid $4 for a bracelet. 60% of a month’s purchases is paid f following month. All sales are on credit, with no discount, and payable wit of a month’s sales are collected in the month of sale. An additional 70% is collected in the second month following sale. Bad debts have been neglig Monthly operating expenses for the company are given below: Insurance is paid on an annual basis, in November of each year. The company plans to purchase $20,000 in new equipment during May an be for cash. The company declares dividends of $15,000 each quarter, pa A listing of the company’s ledger accounts as of March 31 is given below:
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Assets Cash $74,000 Accounts Receivable $346,000 Inventory $104,000 Prepaid Insurance $21,000 Property and Equipment (net) $950,000 Total Assets $1,495,000 Accounts Payable $100,000 Dividends Payable $15,000 Capital Stock $800,000 Retained Earnings $580,000 $1,495,000 The company maintains a minimum cash balance of $50,000. All borrowin made at the end of a month. (Exception: The company may dip below the amount due in interest expenses.) The annual interest rate is 17%. Interest is computed and paid at the end Requirements: Prepare a master budget for the three-month period ending June 30. Include A sales budget, by month and in total. A schedule of expected cash collections from sales, by month and in total. A merchandise purchases budget in units and in dollars. Show the budget b A schedule of expected cash disbursements for merchandise purchases, by A cash budget. Show the budget by month and in total. Determine any borr balance of $50,000. A budgeted income statement for the three-month period ending June 30. U
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This homework help was uploaded on 02/20/2009 for the course AEM 241 taught by Professor Grossman during the Spring '08 term at Cornell.

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Lebo_Excel_Problem_Set_Solutoin - Lebo&TCo I T R...

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