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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
