Course Project
By: CURTISGRL4EVER • Essay • 463 Words • May 15, 2011 • 2,000 Views
Course Project
Earrings Unlimited
1
a Sales budget
April May June Total
Sales (units) 65,000 100,000 50,000 215,000
Sales (dollars) $650,000 $1,000,000 $500,000 $2,150,000
b Cash collections from sale
April May June Total
February sales $26,000 $26,000
March sales $280,000 $40,000 $320,000
April sales $130,000 $455,000 $65,000 $650,000
May sales $200,000 $700,000 $900,000
June sales $100,000 $100,000
Total collections $436,000 $695,000 $865,000 $1,996,000
c Merchandise purchase budget
April May June Total
In units
Desired ending inventory 40,000 20,000 12,000 72,000
Add: Sales during the month 65,000 100,000 50,000 215,000
Less: Opening inventory (26,000) (40,000) (20,000) (86,000)
Purchases 79,000 80,000 42,000 201,000
Purchases (in dollars) @$4 per unit $316,000 $320,000 $168,000 $804,000
d Cash disbursement for purchases
April May June Total
March purchases $100,000 $100,000
April purchases $158,000 $158,000 $316,000
May purchases $160,000 $160,000 $320,000
June purchases $84,000 $84,000
Total disbursements $258,000 $318,000 $244,000 $820,000
2 Cash budget
April May June Total
Beginning cash balance $74,000 $50,000 $50,000 $74,000
Receipts from customers $436,000 $695,000 $865,000 $1,996,000
Total cash $510,000 $745,000 $915,000 $2,070,000
Cash disbursements:
To vendors for purchases $258,000 $318,000 $244,000 $820,000
Sales commissions $26,000 $40,000 $20,000 $86,000
Advertising $200,000 $200,000 $200,000 $600,000
Rent $18,000 $18,000 $18,000 $54,000
Salaries $106,000 $106,000 $106,000 $318,000
Utilities $7,000 $7,000 $7,000 $21,000
Purchase of new equipment $- $16,000 $40,000 $56,000
Payment of dividends $15,000 $- $- $15,000
Interest on borrowings $- $- $5,300 $5,300
Total disbursements $630,000 $705,000 $640,300 $1,975,300
Excess(Deficiency) of Cash Available $(120,000) $40,000 $274,700 $94,700
Financing:
Cash Borrowed $170,000 $10,000 $- $180,000