Student Name: Marcie DeGiovine

Class: BA51 6/1 -9/30/2013

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: Marcie DeGiovine

Class: BA51 6/1 -9/30/2013
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
Land 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
$10,000
886,000
896,000

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
0
972,250

(37,750)

(69,000)

29,750

(76,250)

48,000
0
0
48,000
$10,250
Correct!

79,000
0
0
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: Marcie DeGiovine

Class: BA51 6/1 -9/30/2013
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

$10,730
450,000
180,000
10,800
193,200
$844,730
Correct!

Liabilities and Equity

Accounts payable, purchases
Dividends payable
Notes payable, bank
Capital stock, no par
Retained earnings
Total liabilities and equity

$105,000
12,000
111,000
300,000
316,730
$844,730

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
328,730
(12,000)
$316,730

Given Data C09-23:

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 C09-23:

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