PROJECT A - Case 9-30

Earrings Unlimited

Student Name:

SALES BUDGET:
April

Budgeted unit sales
Selling price per unit
Total Sales

65,000
$10.00
$650,000.00

May

100,000
$10.00
$1,000,000.00

Percentage of sales in the month of sale
Percentage of sales in the month after the sale
Percentage of sales in the second month after sale
Cost Per Pair of Earrings
Purchase Payment schedule

June

50,000
$10.00
$500,000.00

Quarter

215,000
$10.00
$2,150,000.00

20.00%
70.00%
10.00%
$10.00
50.00%

Actual and Budgeted Sales
January (actual)
February (actual)
March (actual)
April (budget)
May (budget)

20,000
26,000
40,000
65,000
100,000

June (budget)
July (budget)
August (budget)
Sept (budget)

SCHEDULE OF EXPECTED CASH COLLECTIONS:
April

February sales
March sales
April sales
May sales
June sales
Total Cash Collections

$26,000.00
$280,000.00
$130,000.00

$436,000.00

May

$40,000.00
$455,000.00
$200,000.00
$695,000.00

50,000
30,000
28,000
25,000

June

$65,000.00
$700,000.00
$100,000.00
$865,000.00

Quarter

$26,000.00
$320,000.00
$650,000.00
$900,000.00
$100,000.00
$1,996,000.00

MERCHANDISE PURCHASES BUDGET:
April

Budgeted unit sales
Add desired ending inventory
Total needs
Less beginning inventory
Required purchases
Cost of purchases @ $4 per unit
Inventory needed for following month
Cost of purchases per unit

65,000
40,000
105,000
26,000
79,000
$316,000.00

May

100,000
20,000
120,000
40,000
80,000
$320,000.00
40.00%
$4.00

June

50,000
12,000
62,000
20,000
42,000
$168,000.00

Quarter

215,000
12,000
227,000
26,000
201,000
$804,000.00

Assets
Cash
Accounts Receivable ($26,000 February sales;
$320,000 March sales)
Inventory
Prepaid Insurance
Property and Equipment (net)
Total Assets

$74,000.00
$346,000.00
$104,000.00
$21,000.00
$950,000.00
$1,495,000.00

Liabilities and Stockholders' Equity
Accounts payable
Dividends payable
Capital Stock
Retained Earnings
Total liabilities and Stockholders equity

$100,000.00
$15,000.00
$800,000.00
$580,000.00
$1,495,000.00

BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:
April
May

Accounts payable
April purchases
May purchases
June purchases
Total cash payments

$100,000.00
$158,000.00

$258,000.00

$158,000.00
$160,000.00
$318,000.00

June

$160,000.00
$84,000.00
$244,000.00

Quarter

$100,000.00
$316,000.00
$320,000.00
$84,000.00
$820,000.00

Monthly Operating Expenses
Variable:
Sales commissions
Fixed:
Advertising
Rent
Salaries
Utilities
Insurance
Depreciation

4.00% of Sales
$200,000.00
$18,000.00
$106,000.00
$7,000.00
$3,000.00
$14,000.00
EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
April
May

June

Quarter

Total cash available

$74,000.00
$436,000.00
$510,000.00

$50,000.00
$695,000.00
$745,000.00

$50,000.00
$865,000.00
$915,000.00

$174,000.00
$1,996,000.00
$2,170,000.00

Less Disbursements
Merchandise purchases
Advertising

$258,000.00
$200,000.00

$318,000.00
$200,000.00

$244,000.00
$200,000.00

$820,000.00
$600,000.00

Cash balance Min $50,000
Add collections from customers

Rent
Salaries
Commissions
Utilities
Equipment purchases
Dividends paid
Total Disbursements

$18,000.00
$106,000.00
$26,000.00
$7,000.00

Excess (deficiency) of receipts over disbursements
Financing:
Borrowings (maintain 50,000)
Repayments(maintain 50,000)
Schedule
@
1.00%
Interest (Total)
Total financing

Cash balance, ending

$18,000.00
$106,000.00
$40,000.00
$7,000.00
$16,000.00

$18,000.00
$106,000.00
$20,000.00
$7,000.00
$40,000.00

$15,000.00