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Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipement, which occur during May.

Seved 2 Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter points a. Budgeted monthly absorption costing income statements for April-July are: eBock Sales Cost of goods sold Gross margin Selling and administrative expenses : s 570,000 $770,000 470,000 $ 370.000 99,000 539,000329,000 259,000 171.000 231,000141,000 111,000 77-000 97,000S8,000.000 43,50058 40036 20035 000 Total selling and administrative expennes120,5005 400il94 200lll 72,000 50.500 75,600 46.800 39,000 Print Selling expense Net operating incone References Includes $19,000 of depreciation each month. b. Sales are 20% for cash and 80% on account. c. Sales on account are collected over a three-month period with 10% collected in the month of sale: 80% collected in the first month following the month of sale; and the remaining 10% collected in the second month following the month of sale. February's sales totaled $185,000, and March's sales totaled $235,000. d. Inventory purchases are paid for within 15 days. Therefore, 50% of a m onth's inventory purchases are paid for in the month of purchase. The remaining 50% is pa d in the following month. Accounts payable at March 31 for inventory purchases during March total $105.700 e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $79,800 f Dividends of $27,000 will be declared and paid in April. g. Land costing $35,000 will be purchased for cash in May h. The cash balance at March 31 is $49,000; the company must maintain a cash balance of at least $40,000 at the end of each month L. The company has an agreement with a local bank that allows the company to borrow in Increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Required: Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total 3. Prepare a cash budget for April, May, and June as well as in total for the quarter i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter points Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter eBook Print Complete this question by entering your answers in the tabs below Required 1 Required 2A Required 28 Required 3 Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total Schedule of Expected Cash Collections April Ma Quarter Cash sales Sales on account: March Apri May June Total cash collections Required 2A> 2 inventory at March i1 ls $79.ao0. f Dividends of $27000 will be declared and paid in April. g. Land costing $35,000 will be purchased for cash in May h. The cash balance at March 31 is $49.000; the company must maintain a cash balance of at least $40,000 at the end of each month. L The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rte on these loans is 1% per month and for simplicity we will ts assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter. book Print Complete this question by entering your answers in the tabs below Required 1 Required 2ARequired 28 Required 3 Prepare the following for merchandise inventory, a merchandise purchases budget for April, May, and June Merchandise Purchases Budget Aprill May June Total needs Required inventory purchases Required 1 Required 2B> inventory at March 31 is $79,800. Dividends of $27,000 will be declared and paid in April. g. Land costing $35,000 will be purchased for cash in May h. The cash balance at March 31 is $49,000; the company must maintain a cash balance of at least $40.000 at the end of each month L The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month up to a total loan balance of $200, The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Required: 1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total. 2. Prepare the following for merchandise inventory a. A merchandise purchases budget for April, May, and June. b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total. 3. Prepare a cash budget for April, May, and June as well as in total for the quarter Complete this question by entering your answers in the tabs below Required 1 Required 2A Required 2B Required 3 Prepare the following for merchandise inventory, a schedule of expectes cash disbursements April, May, and June, and for the quarter in total. for merchandise purchases for Schedule of Expected Cash Disbursements for Merchandise Purchases April May June Quarter April purchases May purchases June purchases Total cash disbursements Required 2A Required 3> 2 Required 1 Required 2A Required 2B Required:3 Prepare a cash budget for April, May, and June as well as in total for the quarter. (Cash deficiency, repayments and Interest should be indicated by a minus sign.) points Garden Sales, Inc. Cash Budget For the Quarter Ended June 30 eBook April May June Quarter Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Print References Purchases for inventory Selling expenses Administrative expenses Land purchases Dividends paid Total cash disbursements Excess (deficlency) of cash available over disbursements Borrowings Repayment Total financing Ending cash balance Required 2

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