Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands).NORDSTROMBalance SheetMarch 31Liabilities and Stockholders' Equity$2,525 Merchandise purchases payable $2,400Dividends payable 710Stockholders' equity 8,005AssetsCashAccounts receivableInventory2,0403,400Prepaid Insurance150Fixtures3,000Total assets$11,115Total liabilities and equity $11,115Actual and forecasted sales for selected months in the upcoming year are as follows:Month (in thousands) Sales RevenueJanuaryFebruaryMarchAprilMayJuneJulyAugust$2,6002,7003,0003,6003,8003,5003,2004,000Monthly operating expenses are as follows:Wages and salaries $750DepreciationAdvertisingOther costs7555350Cash dividends for the store of $710 thousand are declared during the third month of each quarter and arepaid during the first month of the following quarter. Operating expenses, except insurance, rent, anddepreciation are paid as incurred. The prepaid insurance is for five more months. Cost of goods sold is equalto 60% of sales. Ending inventories are sufficient for 150% of the next month's cost of sales. Purchases duringany given month are paid in full during the following month. Cash sales account for 50% of the revenue. Of thecredit sales, 60% are collected in the next month and 40% are collected in the month after. Money can beborrowed and repaid in multiples of $100 thousand at an interest rate of 12% per year. The company desires aminimum cash balance of $2 million on the first of each month. At the time the principal is repaid, interest ispaid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and allrepayment is at the end of the month. Money is never repaid at the end of the month it is borrowed.(c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30. Do not include repayments of borrowings.NORDSTROMSSchedule of Monthly Cash Disbursements (in thousands)Quarter Ending June 30Total cash disbursementsAprilMay0x $June0x $ 0x $Total0x(d) Prepare a cash budget for each month of the second quarter ending June 30. Include budgeted borrowings and repaymentsOnly use negative signs, if needed, for: excess receipts over disbursements, balance before borrowings and cash balances (beginning and ending).NORDSTROMSMonthly Cash Budget (in thousands)Quarter Ending June 30AprilMayJuneTotalCash balance, beginning$0x $0x $0x0xReceipts0x0x0x0xDisbursements0x0x0x0xExcess receipts over disb.0x0x0 x0 xBalance before borrowings0x0x0x0 xBorrowings0x0 ✓0✓0xLoan repayments0 ✓0x0x0xCash balance, ending$0x$0x $0x $0x

Budgeting is the process of undertaking plans to spend money. This plan enables the business to…

Answered: (c) Prepare a cash disbursements…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands). Cash NORDSTROM Balance Sheet March 31 Liabilities and Stockholders' Equity $ 2,525 Merchandise purchases payable $2,400 2,040 3,400 Dividends payable 710 Stockholders' equity 8,005 Assets Accounts receivable Inventory Prepaid Insurance 150 Fixtures 3,000 $11,115 Total liabilities and equity $11,115 Total assets Actual and forecasted sales for selected months in the upcoming year are as follows: Month (in thousands) Sales Revenue January February March April May June July August $2,600 2,700 3,000 3,600 3,800 3,500 3,200 4,000 Monthly operating expenses are as follows: Wages and salaries $750 Depreciation 75 Advertising Other costs 55 350 Cash dividends for the store of $710 thousand are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses,…
Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands). Cash NORDSTROM Balance Sheet March 31 Liabilities and Stockholders' Equity $ 2,525 Merchandise purchases payable $2,400 710 Dividends payable Stockholders' equity 8,005 Assets Accounts receivable Inventory 2,040 3,400 Prepaid Insurance 150 Fixtures 3,000 Total assets $11,115 Total liabilities and equity $11,115 Actual and forecasted sales for selected months in the upcoming year are as follows: Month (in thousands) Sales Revenue January February March April May June July August $2,600 2,700 3,000 3,600 3,800 3,500 3,200 4,000 Monthly operating expenses are as follows: Wages and salaries $750 Depreciation 75 Advertising Other costs 55 350 Cash dividends for the store of $710 thousand are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses,…
Assume Nordstrom prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for one of its stores (in thousands). Cash NORDSTROM Balance Sheet March 31 Liabilities and Stockholders' Equity $ 2,525 Merchandise purchases payable $2,400 710 Dividends payable Stockholders' equity 8,005 Assets Accounts receivable Inventory 2,040 3,400 Prepaid Insurance 150 Fixtures 3,000 Total assets $11,115 Total liabilities and equity $11,115 Actual and forecasted sales for selected months in the upcoming year are as follows: Month (in thousands) Sales Revenue January February March April May June July August $2,600 2,700 3,000 3,600 3,800 3,500 3,200 4,000 Monthly operating expenses are as follows: Wages and salaries $750 Depreciation 75 Advertising Other costs 55 350 Cash dividends for the store of $710 thousand are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses,…
Classique Household Furnishings & Appliances is a family-owned furniture store. You are themanagement accountant of the concern and have been given the task of preparing the cash budget for thebusiness for the quarter ending September 30, 2018. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows: MonthCashSalesSalesOn AccountPurchasesOn AccountMay $50,000 $480,000 $390,000June $65,000 $600,000 $360,000July $43,400 $720,000 $450,000August $52,800 $640,000 $400,000September $56,750 $800,000 $500,000ii) An analysis of the records shows that trade receivables (accounts receivable) for sales on accountare settled according to the following credit pattern, in accordance with the credit terms 5/30, n90:50% in the month of sale35% in the first month following the sale15% in the second month following the saleiii) Accounts payable are settled as follows, in accordance with the credit terms – 4/30, n60:70% in the month in which the…
Classique Household Furnishings & Appliances is a family-owned furniture store. You are themanagement accountant of the concern and have been given the task of preparing the cash budget for thebusiness for the quarter ending September 30, 2018. Your data collection has yielded the following:i) Extracts from the sales and purchases budgets are as follows:MonthCashSalesSalesOn AccountPurchasesOn AccountMay $50,000 $480,000 $390,000June $65,000 $600,000 $360,000July $43,400 $720,000 $450,000August $52,800 $640,000 $400,000September $56,750 $800,000 $500,000ii) An analysis of the records shows that trade receivables (accounts receivable) for sales on accountare settled according to the following credit pattern, in accordance with the credit terms 5/30, n90:50% in the month of sale35% in the first month following the sale15% in the second month following the saleiii) Accounts payable are settled as follows, in accordance with the credit terms – 4/30, n60:70% in the month in which the…
* CengageNOWv2 | Online teachin x v.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false еВook Show Me How E Print Item Cash Budget The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: June July August Sales $160,000 $185,000 $200,000 Manufacturing costs 66,000 82,000 105,000 Selling and administrative expenses 40,000 46,000 51,000 Capital expenditures 120,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent $12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing…
Budgeting-Create a forecasted balance sheet from the following information. I need an explanation on how to get the accounts receivable, ending merchandise inventory, accounts payable, and owner's equity columns for the balance sheet. Data Section: Actual and Budgeted Unit Sales: April 1,500 May 1,000 June 1,600 July 1,400 August 1,500 September 1,200 Balance Sheet, May 31, 19X5 Cash $8,000 Accounts receivable 107,800 Merchandise inventory 52,800 Fixed assets (net) 130,000 -------- Total assets $298,600 ======== Accounts payable (merchandise) $74,800 Owner's equity 223,800 -------- Total liabilities & equity $298,600 ======== Average selling price $98 Average purchase cost per unit $55 Desired ending inventory (% of next…
Classique Household Furnishings & Apoliances is a family-owned furniture store. To the management accountant of the concern and have ben given the task of preparing the cash budget for the business for the quarter ending September 30, 2018. Your data collection has yielded the following Extracts from the sales and purchases budgets are as follows: Cash Sales Purchases On Account Month Sales On Account May $50,000 $65,000 $480.000 $600.000 $390,000 $360,000 $450,000 $400,000 $500,000 June July $43.400 $52.800 $720,000 August September $640,000 $800,000 $56.750 An analysis of the records shows that trade receivables (accounts receivable) for sales on account are settled according to the following credit pattern, in accordance with the credit terms 5/30, n90 50% in the month of sale 35% in the first month following the sale 15% in the second month following the sale Accounts payable are settled as follows, in accordance with the credit terms- 4/30, n60: 70% in the month in which the…
GIVE NOTES SHOW ACCOUNT RECEIVABLE AND ACCOUNT PAYABLE The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Month Cash Sales Sales on account Purchase August September October November December $85,000 $70,000 $88,550 $77,160 $174,870 $640,000 $550,000 $600,000 $800,000 $500,000 $420,000 $550,000 $500,000 $600,000 $450,000 An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale Expected purchases include monthly cash purchases of 5%. All other purchases are…
Required Information TES-417 Inc. is a retailer. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-417 Inc. Balance Sheet March 31 Assets Cash Accounts receivable 129,808 Inventory 52,508 217,000 Plant and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity ps payable 347,808 Retained earnings Total liabilities and stockholders' equity 488,508 TES-417 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $280,000, $300,000, $290,000, and $310,000, respectively. 2. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April. 3. Each month's ending inventory must equal 25% of next month's cost of goods sold. The cost of goods sold is 75% of sales. The company pays for 40% of its merchandise…
G & J Merchandising & More is a family-owned auto-parts store. You are the managementaccountant of the concern and have been given the task of preparing the cash budget for thebusiness for the quarter ending March 31, 2021. Your data collection has yielded the following:(i) Extracts from the sales and purchases budgets are as follows:MonthNovember 2020 – March 2021 Cash Sales Sales on Account Purchases November $151,100 $480,000 $390,000December $145,500 $600,000 $360,000January $159,025 $700,000 $505,000February $169,350 $650,000 $400,000March $176,200 $800,000 $518,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 2/30, n90:45% in the month of sale30% in the first month following the sale25% in…
G & J Merchandising & More is a family-owned auto-parts store. You are the managementaccountant of the concern and have been given the task of preparing the cash budget for thebusiness for the quarter ending March 31, 2021. Your data collection has yielded the following:(i) Extracts from the sales and purchases budgets are as follows:MonthNovember 2020 – March 2021 Cash Sales Sales on Account Purchases November $151,100 $480,000 $390,000December $145,500 $600,000 $360,000January $159,025 $700,000 $505,000February $169,350 $650,000 $400,000March $176,200 $800,000 $518,000 (ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 2/30, n90:45% in the month of sale30%…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS