Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.: April May June Sales $ 112,000 $ 136,000 $ 152,000 Cost of goods sold* 76,800 91,200 100,800 Gross profit $ 35,200 $ 44,800 $ 51,200 Operating expenses† 17,600 20,000 21,600 Operating income $ 17,600 $ 24,800 $ 29,600 *Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead). †Includes all period costs (i.e., selling, general, and administrative expenses). The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the first month after the sale is made, and 35% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $9,600 of the estimated monthly cost of goods sold and $6,400 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 90% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month. Current assets as of April 1, 2019, consist of cash of $11,200 and accounts receivable of $119,840 ($84,000 from March credit sales and $35,840 from February credit sales). Current liabilities as of April 1 consist of $14,400 of accounts payable for product costs incurred in March; $3,680 of accrued liabilities for operating expenses incurred in March; and a $38,000, 12%, 120-day note payable that is due on April 17, 2019. An estimated income tax payment of $36,000 will be made in May. The regular quarterly dividend of $12,800 is expected to be declared in May and paid in June. Capital expenditures amounting to $13,760 will be made in April. Required: a. Complete the monthly cash budgets for the second quarter of 2019 using the following format. Note that the ending cash balance for June is provided as a check figure. (Use 360 days year for calculations.)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Dear Bartleby, can you please help with "calculations for cost of goods sold/operating expenses occured in the following problem, for March, April, May and June, thank you. Following are the
| April | May | June | |||||||||
| Sales | $ | 112,000 | $ | 136,000 | $ | 152,000 | |||||
| Cost of goods sold* | 76,800 | 91,200 | 100,800 | ||||||||
| Gross profit | $ | 35,200 | $ | 44,800 | $ | 51,200 | |||||
| Operating expenses† | 17,600 | 20,000 | 21,600 | ||||||||
| Operating income | $ | 17,600 | $ | 24,800 | $ | 29,600 | |||||
*Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).
†Includes all period costs (i.e., selling, general, and administrative expenses).
The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the first month after the sale is made, and 35% are expected to be collected in the second month after sale. Depreciation, insurance, and property taxes represent $9,600 of the estimated monthly cost of goods sold and $6,400 of the estimated monthly operating expenses. The annual insurance premium is paid in January, and the annual property taxes are paid in August. Of the remainder of the cost of goods sold and operating expenses, 90% are expected to be paid in the month in which they are incurred, and the balance is expected to be paid in the following month.
Current assets as of April 1, 2019, consist of cash of $11,200 and accounts receivable of $119,840 ($84,000 from March credit sales and $35,840 from February credit sales). Current liabilities as of April 1 consist of $14,400 of accounts payable for product costs incurred in March; $3,680 of accrued liabilities for operating expenses incurred in March; and a $38,000, 12%, 120-day note payable that is due on April 17, 2019.
An estimated income tax payment of $36,000 will be made in May. The regular quarterly dividend of $12,800 is expected to be declared in May and paid in June. Capital expenditures amounting to $13,760 will be made in April.
Required:
a. Complete the monthly
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