Problem 9-26 (120 minutes)
1. Schedule of expected cash collections:
January
February
March
Quarter
Cash sales ………………………
$28,000
$32,000
$34,000
$ 94,000
Credit sales* …………………..
36,000
42,000
48,000
126,000
Total collections ……………….
$64,000
$74,000
$82,000
$220,000
*60% of the preceding month’s sales.
2. Merchandise purchases budget:
January
February
March
Quarter
Budgeted cost of goods sold
(70% of sales)………………
$49,000
$56,000
$59,500
$164,500
Add desired ending
inventory* ……………………
11,200
11,900
7,700
7,700
Total needs …………………….
60,200
67,900
67,200
172,200
Less beginning inventory …..
9,800
11,200
11,900
9,800
Required purchases ………….
$50,400
$56,700
$55,300
$162,400
*At March 30: April sales $55,000 × 70% × 20% = $7,700.
Schedule of expected cash disbursements—merchandise purchases
January
February
March
Quarter
December purchases ………..
$32,550
$ 32,550
January purchases …………..
12,600
$37,800
50,400
February purchases ………….
14,175
$42,525
56,700
March purchases ……………..
13,825
13,825
Total disbursements …………
$45,150
$51,975
$56,350
$153,475
Problem 9-26 (continued)
6.
Picanuy Corporation
Balance Sheet
March 31
Assets
Current assets:
Cash (Part 4) …………………………………………………….
$ 5,115
Accounts receivable ($85,000 × 60%) …………………….
51,000
Inventory (Part 2) ………………………………………………
7,700
Total current assets ………………………………….…………..
63,815
Fixed assets—net
($110,885 + $3,000 + $8,000 – $2,400) …………………
119,485
Total assets …………………………………………………………
$183,300
Accounts payable (Part 2: $55,300 × 75%) …..
Bank loan payable …………………………………..
Total liabilities and equity ………………………….
Retained earnings, beginning ………………….
Add net income ……………………………………
Retained earnings, ending ….………………….
