1. Prepare a Cash Receipts Budget for the quarter ending June 30th, by month and quarter. You do not need a formal sales budget since the sales budget is above in the data.
2. Prepare a merchandise purchase budget by month and quarter. A merchandiser purchases in dollars. I have set up a formatted budget for you. You can see how I have made a few minor changes to Schedule 2 on page 356, which is a production budget which we are not preparing. Make sure you think about the numbers you use in the quarter column. I am specifically talking about how you handle beginning and ending inventory.
3. Prepare a Selling and Administrative Expense Budget, by month and quarter. My budget is a little bit different than the one in the text, because I used percentage of sales dollar.
4. Prepare a Cash Disbursements Budget, by month and quarter.
5. Prepare a cash budget showing the months and quarter. Use the format I have provided on the budget sheet.
Do not worry about a minimum cash balance or financing needs, since we are trying to develop a cash management plan.
6. Based on the quarterly cash budget you prepared, do you have any recommendations on cash management. Discuss the type of business and the cash flow problems a company in this industry might have. Type your answer on the budget worksheet , where I have set out the question.
7. Prepare a budgeted income statement for the quarter ending June 30, 20XX. You do not need to show monthly columns.
8. What do you think about the survivability of this business?
9. What if the company finds out the monthly rent will increase to $3,000, what budgets are effected? Why?
What is the New Net income(Loss)? If you have linked everything correctly, you should only have to change the monthly rent on this sheet to determine your answer to the questions asked.
