Hillyard company_budget | Accounting homework help

·         Hillyard Company

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis.  The following data have been assembled to assist in preparing the master budget for the first quarter:

1.    As of December 31, (the end of the prior quarter), the company’s general ledger showed the following account balances:

Cash \$48,000 (debit)
Accounts receivable \$224,000 (debit)
Inventory \$60,000 (debit)
Buildings and equipment, net \$370,000 (debit)
Accounts payable \$93,000 (credit)
Capital stock \$500,000 (credit)
Retained earnings \$109,000 (credit)

2.    Actual sales for December and budgeted sales for the next four months are as follows:  December \$280,000, January \$400,000, February \$600,000, March \$300,000 and April \$200,000.

3.    Sales are 20% for cash and 80% on credit.  All payments on credit sales are collected in the month following sale.  The accounts receivable at December 31 are a result of December credit sales.

4.    The company’s gross margin is 40% of sales.  (In other words, cost of goods sold is 60% of sales.)

5.    Monthly expenses are budgeted as follows:  salaries and wages, \$27,000 per month; advertising, \$70,000 per month; shipping, 5% of sales; other expenses, 3% of sales.  Depreciation, including depreciation on new assets acquired during the quarter, will be \$42,000 per quarter.

6.    Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7.    One half of the month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8.    During February, the company will purchase a new copy machine for \$1,700 cash.  During March, other equipment will be purchased for cash at a cost of \$84,500.

9.    During January, the company will declare and pay \$45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of \$30,000.  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.  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:
Using the data above, complete the following statements and schedules for the first quarter:

Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors: