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Colerain Corporation is a merchandising company that is preparing-(Answered)

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Colerain Corporation is a merchandising company that is preparing a profit plan for the third quarter of the calendar year. The company?s balance sheet as of June 30 is shown below:


Colerain Corporation
Balance Sheet
June 30
Assets
??Cash $ 81,000 ???
??Accounts receivable ? 128,000 ???
??Inventory ? 37,800 ???
??Plant and equipment, net of depreciation ? 210,000 ???
?
??Total assets $ 456,800 ???
?
Liabilities and Stockholders? Equity ? ?
??Accounts payable $ 52,500 ???
??Common stock ? 310,000 ???
??Retained earnings ? 94,300 ???
?
??Total liabilities and stockholders? equity $ 456,800 ???
?

Colerain?s managers have made the following additional assumptions and estimates:

1.

Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively.

2.

All sales are on credit and all credit sales are collected. Each month?s credit sales are collected 20% in the month of sale and 80% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

3.

Each month?s ending inventory must equal 30% of the cost of next month?s sales. The cost of goods sold is 60% of sales. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining 50% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

4.

Monthly selling and administrative expenses are always $66,000. Each month $4,000 of this total amount is depreciation expense and the remaining $62,000 relates to expenses that are paid in the month they are incurred.

5.

The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.


Required:
1.

Prepare a schedule of expected cash collections for July, August, and September. Also compute total cash collections for the quarter ended September 30th.?(Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)

????
? Schedule of Expected Cash Collections ?
? ?????July ?????August ?????September ?????Total
??From accounts receivable $??? $??? $??? $???
??From July sales ?? ?? ?? ??
??From August sales ?? ?? ?? ??
??From September sales ?? ?? ?? ??
?
??Total cash collections?? $??? $??? $??? $???
?
??
2a.

Prepare a merchandise purchases budget for July, August, and September. Also compute total merchandise purchases for the quarter ended September 30th.?(Input all amounts as positive values. Do not round intermediate calculations.)

?????
Merchandise Purchases Budget
? ?????July ?????August ?????September ?????Total
??Budgeted cost of goods sold $??? $??? $??? $???
??(Click to select)Add:Deduct:?(Click to select)Ending inventoryBeginning inventory ?? ?? ?? ??
?
??Total needs ?? ?? ?? ??
??(Click to select)Add:Deduct:?(Click to select)Beginning inventoryEnding inventory ?? ?? ?? ??
?
??Required purchases?? $??? $??? $??? $???
?
??
2b.

Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also compute total cash disbursements for merchandise purchases for the quarter ended September 30th.?(Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)

???
Schedule of Expected Cash Disbursements?Merchandise Purchases
? ?????July ?????August ?????September ??????Total
??From accounts payable?? $??? $??? $??? $???
??For July purchases?? ?? ?? ?? ??
??For August purchases?? ?? ?? ?? ??
??For September purchases?? ?? ?? ?? ??
?
??Total cash disbursements?? $??? $??? $??? $???
?
??
3.

Prepare an income statement for the quarter ended September 30th.?(Input all amounts as positive values except losses which should be indicated by a minus sign. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required.)

???
Colerain Corporation
Income Statement
For the Quarter Ended September 30
??(Click to select)Cost of goods soldSalesNet income (loss)Gross marginNet operating income (loss)Interest expenseSelling and administrative expenses $???
??(Click to select)Net operating income (loss)Gross marginCost of goods soldInterest expenseNet income (loss)Selling and administrative expensesSales ??
?
??(Click to select)Cost of goods soldSalesNet operating income (loss)Interest expenseSelling and administrative expensesGross marginNet income (loss) ??
??(Click to select)Selling and administrative expensesInterest expenseCost of goods soldNet income (loss)Gross marginNet operating income (loss)Sales ??
?
??(Click to select)Net operating income (loss)Cost of goods soldInterest expenseSelling and administrative expensesSalesGross marginNet income (loss) ??
??(Click to select)SalesNet income (loss)Cost of goods soldNet operating income (loss)Selling and administrative expensesInterest expenseGross margin ??
?
??(Click to select)Gross marginNet operating income (loss)SalesSelling and administrative expensesCost of goods soldInterest expenseNet income (loss) $???
?
??
4.

Prepare a balance sheet as of September 30th.?(Be sure to list the assets and liabilities in order of their liquidity. Do not round intermediate calculations.)

???
Colerain Corporation
Balance Sheet
September 30
Assets ?
??(Click to select)Capital stockCashNotes payableRetained earningsAccounts payable? $???
??(Click to select)Accounts receivableAccounts payableNotes payableCapital stockRetained earnings ??
??(Click to select)InventoryRetained earningsCapital stockAccounts payablePlant and equipment, net ??
??(Click to select)Accounts payableInventoryCapital stockPlant and equipment, netRetained earnings ??
??Total assets?? $???
??Liabilities and Stockholders' Equity ??
???? ??
??(Click to select)CashNotes receivableAccounts payableAccounts receivableInventory? $???
??(Click to select)Capital stockPlant and equipment, netInventoryAccounts receivableCash? ??
??(Click to select)Retained earningsCashAccounts receivablePlant and equipment, netInventory? ??
?
??Total liabilities and stockholders' equity?? $???
?



 

Paper#9256972 | Written in 27-Jul-2016

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