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Shilow Company Master Budget Overview

The Shilow Company Master Budget outlines expected cash collections, merchandise purchases, cash disbursements, and financial statements for the quarter ending June 30. It includes projected cash flows, inventory needs, and an absorption costing income statement showing a net operating income of $5,340. The budgeted balance sheet reflects total assets of $206,440, balanced by total liabilities and equity.

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13 views3 pages

Shilow Company Master Budget Overview

The Shilow Company Master Budget outlines expected cash collections, merchandise purchases, cash disbursements, and financial statements for the quarter ending June 30. It includes projected cash flows, inventory needs, and an absorption costing income statement showing a net operating income of $5,340. The budgeted balance sheet reflects total assets of $206,440, balanced by total liabilities and equity.

Uploaded by

Zeshamchaudhry
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Shilow Company – Master Budget

(Chapter 8)

problem no 8.29
1. Schedule of Expected Cash Collections
Month Cash Sales Credit Sales (Prior Total Collections
Month)
April $36,000 $20,000 $56,000
May $43,200 $24,000 $67,200
June $54,000 $28,800 $82,800
Quarter Total $206,000

2. Merchandise Purchases Budget


Month COGS Ending Total Needs Beginning Required
Inventory Inventory Purchases
April $45,000 $43,200 $88,200 $36,000 $52,200
May $54,000 $54,000 $108,000 $43,200 $64,800
June $67,500 $28,800 $96,300 $54,000 $42,300
Quarter $159,300

3. Expected Cash Disbursements for Inventory Purchases


Month Prior Month (50%) Current Month Total Disbursement
(50%)
April $21,750 $26,100 $47,850
May $26,100 $32,400 $58,500
June $32,400 $21,150 $53,550
Quarter $159,900

4. Cash Budget
Description April May June
Beginning Cash $8,000 $1,350 $5,590
Cash Collections $56,000 $67,200 $82,800
Total Available $64,000 $68,550 $88,390
Inventory Purchases $47,850 $58,500 $53,550
Expenses $13,300 $15,460 $18,700
Equipment $1,500 $- $-
Total Disbursement $62,650 $73,960 $72,250
Excess/Deficiency $1,350 -$5,410 $16,140
Financing Needed $- $5,410 $-
Ending Cash $1,350 $4,000 $20,140

5. Absorption Costing Income Statement


Shilow Company – Income Statement for Quarter Ended June 30

Description Amount
Sales Revenue $222,000
COGS (75%) $166,500
Gross Margin (25%) $55,500
Commissions (12%) $26,640
Rent $7,500
Other Expenses (6%) $13,320
Depreciation $2,700
Total Expenses $50,160
Net Operating Income $5,340

6. Budgeted Balance Sheet as of June 30

Assets
Asset Amount
Cash $20,140
Accounts Receivable $36,000
Inventory $28,800
Equipment $121,500
Total Assets $206,440

Liabilities and Equity


Liability/Equity Amount
Accounts Payable $21,150
Loan Payable $5,410
Common Stock $150,000
Retained Earnings $17,590
Total Liabilities & Equity $206,440

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