1.value: 10.00 points The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: …

10.00 points
The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods:

Current assets as of December 31:
Cash $ 6,000
Accounts receivable $ 36,000
Inventory $ 9,800
Buildings and equipment, net $ 110,885
Accounts payable $ 32,550
Capital stock $ 100,000
Retained earnings $ 30,135

a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.)
b. Actual and budgeted sales data are as follows:

December (actual) $ 60,000
January $ 70,000
February $ 80,000
March $ 85,000
April $ 55,000

Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales.
d. Each month’s ending inventory should equal 20% of the following month’s budgeted cost of goods sold.
One-quarter of a month’s inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory.
Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter.
g. Equipment will be acquired for cash: $3,000 in January and $8,000 in February.
Management would like to maintain a minimum cash balance of $5,000 at the end of each month. 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 $50,000. 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.

Using the data above:
1. Complete the following schedule.

Schedule of Expected Cash Collections
January February March Quarter – Total
Cash sales $ 28,000 $ $ $
Credit sales 36,000

Total collections $ 64,000 $ $ $

Complete the following: (Leave no cells blank – be certain to enter “0” wherever required. Input all amounts as positive values.)

Merchandise Purchases Budget
January February March Quarter – Total
Budgeted cost of goods sold $ 49,000 * $ $ $
Add desired ending inventory 11,200 †

Total needs 60,200
Less beginning inventory 9,800

Required purchases $ 50,400 $ $ $

*$70,000 sales × 70% = $49,000.
†$80,000 × 70% × 20% = $11,200.

Schedule of Expected Cash Disbursements—Merchandise Purchases
January February March Quarter – Total
December purchases $ 32,550 * $ $ $ 32,550
January purchases 12,600 37,800 50,400
February purchases
March purchases

Total disbursements $ 45,150 $ $ $

*Beginning balance of the accounts payable.

3. Complete the following schedule:

Schedule of Expected Cash Disbursements—Selling and Administrative Expenses
January February March Quarter – Total
Commissions $ 12,000 $ $ $
Rent 1,800
Other expenses 5,600

Total disbursements $ 19,400 $ $ $

Complete the following cash budget: (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Total Financing should be indicated with a minus sign when the company is repaying amounts that were previously borrowed.)

Picanuy Corporation
Cash Budget
January February March Quarter – Total
Cash balance, beginning $ 6,000 $ $ $
Add cash collections 64,000

Total cash available 70,000

Less cash disbursements:
For inventory 45,150
For operating expenses 19,400
For equipment 3,000

Total cash disbursements 67,550

Excess (deficiency) of cash 2,450


Total financing

Cash balance, ending $ $ $ $

Prepare an absorption costing income statement for the quarter ended March 31. (Input all amounts as positive values.)

Picanuy Corporation
Income Statement
For the Quarter Ended March 31
Cost of goods sold:

Selling and administrative expenses:


6. Prepare a balance sheet as of March 31. (Be sure to list the assets and liabilities in order of their liquidity.)

Picanuy Corporation
Balance Sheet
March 31
Current assets:

Total current assets

Total assets $

Liabilities and Stockholders’ Equity

Stockholders’ equity:

Total liabilities and stockholders’ equity $

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:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
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.

Read more

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.

Read more

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.

Read more

Privacy policy

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.

Read more

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.

Read more
error: Content is protected !!