Student Name:

Class:
Case 09-23
CRAVAT SALES COMPANY
Budgets
April
Sales budget:
Budgeted sales in units
Selling price per unit
Total sales

May

35,000
45,000
$8
$8
$280,000
$360,000
Correct!
Correct!
Schedule of expected cash collections:
February sales
48,000
March sales
112,000
56,000
April sales
70,000
140,000
May sales
90,000
June sales
Total cash collections
$230,000
$286,000
Correct!
Correct!
Merchandise purchases budget:
Budgeted sales in units
35,000
45,000
Add budgeted ending inventory
40,500
54,000
Total needs
75,500
99,000
Less beginning inventory
31,500
40,500
Required purchases in units
44,000
58,500
Unit cost
$5
$5
Required dollar purchases
$220,000
$292,500
Correct!
Correct!
Budgeted cash disbursements for merchandise purchases:
March purchases
85,750
April purchases
110,000
110,000
May purchases
146,250
June purchases
Total cash disbursements
$195,750
$256,250
Correct!
Correct!

June

Quarter

60,000
$8
$480,000
Correct!

140,000
$8
$1,120,000
Correct!

70,000
180,000
120,000
$370,000
Correct!

$48,000
168,000
280,000
270,000
120,000
$886,000
Correct!

60,000
36,000
96,000
54,000
42,000
$5
$210,000
Correct!

140,000
130,500
270,500
126,000
144,500
$5
$722,500
Correct!

146,250
105,000
$251,250
Correct!

85,750
220,000
292,500
105,000
$703,250
Correct!

Student Name:
Class:
Case 09-23
CRAVAT SALES COMPANY
Cash Budget
For the Three Months Ending June 30

Cash balance, beginning

Add receipts from customers
Total cash available
Less disbursements:
Purchase of inventory
Sales commissions
Salaries and wages
Utilities
Miscellaneous
Dividends paid
Equipment purchases
Total disbursements
Excess (deficiency) of receipts
over disbursements
Financing:
Borrowing
Repayments
Interest
Total financing
Cash balance, ending

April
$14,000
230,000
244,000

May
$10,250
286,000
296,250

June
$10,000
370,000
380,000

Quarter
$14,000
886,000
900,000

195,750
35,000
22,000
14,000
3,000
12,000
0
281,750

256,250
45,000
22,000
14,000
3,000
0
25,000
365,250

251,250
60,000
22,000
14,000
3,000
0
0
350,250

703,250
140,000
66,000
42,000
9,000
12,000
25,000
997,250

(37,750)

(69,000)

29,750

(97,250)

48,000
0

79,000
0

48,000
$10,250
Correct!

79,000
$10,000
Correct!

CRAVAT SALES COMPANY

Budgeted Income Statement
For the Three Months Ending June 30
Sales in units
Sales revenue
Variable expenses:
Cost of goods sold
Commissions
Contribution margin
Fixed expenses:
Wages and salaries
Utilities
Insurance expired
Depreciation
Miscellaneous
Net operating income
Less interest expense
Net income

140,000
$1,120,000
700,000
140,000

66,000
42,000
3,600
4,500
9,000

840,000
280,000

125,100
154,900
3,020
$151,880
Correct!

0
16,000
3,020
19,020
$10,730
Correct!

127,000
16,000
3,020
$10,730
Correct!

Student Name:
Class:
Case 09-23
CRAVAT SALES COMPANY
Budgeted Balance Sheet
June 30
Assets
Cash
Accounts receivable
Inventory
Unexpired insurance
Fixed assets, net of depreciation
Total assets
Liabilities and Equity
Accounts payable, purchases
Dividends payable
Notes payable, bank
Capital stock, no par
Retained earnings
Total liabilities and equity

$10,730
450,000
180,000
10,800
168,200
$441,970
Try again!
$105,000
12,000
300,000
24,970
$593,850

Accounts receivable at June 30:

May sales
June sales
Total

$90,000
360,000
$450,000

Retained earnings at June 30:

Balance, March 31
Add net income
Total
Less dividends declared
Balance, June 30

$176,850
151,880
24,970
12,000
$12,970

Given Data C08-29:

CRAVAT SALES COMPANY
Minimum ending cash balance
Selling price
Recent and forecast sales:
January (actual)
February (actual)
March (actual)
April
May
June
July
August
September
Desired ending inventories (percentage
of next month's sales)
Cost of ties

$10,000
$8

20,000
24,000
28,000
35,000
45,000
60,000
40,000
36,000
32,000
90%
$5

Purchases paid as follows:

In month of purchase
In following month

50%
50%

Collection on sales:
Sales collected current month
Sales collected following month
Sales collected 2nd month following

25%
50%
25%

Variable:
Sales commissions per tie
Fixed:
Wages and salaries
Utilities
Insurance
Depreciation
Miscellaneous

$22,000
$14,000
$1,200
$1,500
$3,000

Land purchased in May

Dividends declared each quarter

$25,000
$12,000

$1

Given Data C08-29:

Balance sheet at March 31:
Assets
Cash
Accounts receivable
Inventory
Unexpired insurance
Fixed assets, net of depreciation
Total assets

$14,000
216,000
157,500
14,400
172,700
$574,600

Liabilities and Stockholders' Equity

Accounts payable
$85,750
Dividends payable
12,000
Capital stock
300,000
Retained earnings
176,850
Total liabilities and equity
$574,600

Agreement with Bank:

Borrowing increments
Total loan balance allowed
Interest rate per month
Repayment increments
Total of interest paid each quarter
Required minimum cash balance

$1,000
$40,000
1%
$1,000
100%
$100

Check figures:
(2) June ending cash balance
(3) Net income

$10,730
151,880