CLASSMATE POST 1:
Green Lighting Supply plans inventory levels (at cost) at the end of each month as follows:
May, $271,000; June, $226,000; July, $209,000; and August, $241,000.
Sales are expected to be June, $449,000; July, $359,000; and August, $306,000. Cost of goods sold is 65% of sales.
Purchases in April were $258,000 and in May they were $188,000. Payments for each month’s purchases are made as follows: 15% during that month, 70% the next month, and the final 15% the next month.
Prepare budget schedules for June, July, and August for purchases and for disbursements for purchases.
| April | May | June | July | August | |
| Total Purchases budget | |||||
| Ending inventory | 226,000 | 209,000 | 241,000 | ||
| Cost of goods sold, 65% of sales | 291,850 | 233,350 | 198,900 | ||
| Total needed | 517,850 | 442,350 | 439,900 | ||
| Beginning inventory | 271,000 | 226,000 | 209,000 | ||
| Purchases | 258,000 | 188,000 | 246,850 | 216,350 | 230,900 |
| Total Disbursements for Purchases | |||||
| 15% of this month’s purchases | 37,027.50 | 32,452.50 | 34,635.00 | ||
| 70% of last month’s purchases | 131,600.00 | 172,795.00 | 151,445.00 | ||
| 15% of second-last month’s Purchases | 38,700.00 | 28,200.00 | 37,027.50 | ||
| Total | 207,327.50 | 233,447.50 | 223,107.50 |
CLASSMATE POST 2:
6-31 Sales Budget
A Sendai clothing wholesaler was preparing its sales budget for the first quarter of 20X8. Forecast sales are as follows (all values are in thousands of yen).
January: 203,000
February: 227,000
March: 248,000
Sales are 40% cash and 60% credit. 55% of the credit accounts are collected in the month of sale, 35% in the month following the sale, and 10% in the following month. No uncollectable accounts are anticipated. Accounts receivable at the beginning of 20X8 are 82,950 (10% of November credit sales of 140,000 and 4% of December credit sales of 151,000).
Prepare a schedule showing sales and cash collections for January, February, and March, 20X8.
Above are the two schedules. For the sales budget schedule, I used simple calculations to break out cash (40%) and credit (60%) accordingly. For the cash collections from customer’s schedule, I used formulas to determine the appropriate amounts. For cash sales, I used the cash totals from the sales budget schedule and added 55% of the current month’s credit totals as well. For collections from previous months, I used 35% of the previous month’s credit totals and added 10% of the previous-previous month’s credit totals.
CLASSMATE POST 3:
|
Sales Budget |
|||
|
January |
February |
March |
|
|
Credit Sales, 60% |
¥ 121,800 |
¥ 136,200 |
¥ 148,800 |
|
Cash Sales, 40% |
¥ 81,200 |
¥ 90,800 |
¥ 99,200 |
|
Total Sales |
¥ 203,000 |
¥ 227,000 |
¥ 248,000 |
|
Cash Collections from Customers |
|||
|
January |
February |
March |
|
|
Cash Sales |
¥ 148,190 |
¥ 165,710 |
¥ 181,040 |
|
Collections from Prior Months |
¥ 67,850 |
¥ 57,730 |
¥ 59,850 |
|
Total Collections |
¥ 216,040 |
¥ 223,440 |
¥ 240,890 |
I used an excel spreadsheet to help me calculate the sales budget and cash collections schedules. For the sales budget, I plugged in the total amount of sales in both lines and then went back to create an equation by multiplying the sales amount by either 40% for the cash line and 60% for the credit line.
The cash collections schedule took more time and thought to make sure I was entering the right month’s information and percentage into each cell’s equation. To figure the cash sales for the cash collections schedule, I just copied and pasted the 40% cash information from the sales budget and added 55% of the credit sales for the same month. To figure the collections from prior months, I created an equation to add 35% of the previous months credit sales and 10% of two months prior’s credit sales.
