Share
Explore BrainMass

Master budget for Stumphouse Cheese Company

Stumphouse Cheese Company is a wholesale distributor of blue cheese and ice cream. The following information is available for July 20x7.

Estimated Sales

Blue cheese 160,000 hoops at $10 each
Ice cream 240,000 gallons at $5 each

Desired Inventories

Beginning Ending

Blue cheese 10,000 12,000
Ice cream 4,000 5,000

Estimated costs

Blue cheese $8 per hoop
Ice cream $2 per gallon

Financial information

?Beginning cash balance is $400,000.
?Purchases of merchandise are paid 60 percent in current month and 40 percent in following month. Purchases totaled $1,800,000 in June.
?Employee wages, salaries, and commissions are paid for in current month. Employee expenses for July totaled $156,000.
?Overhead expenses are paid in the next month. The accounts payable for these expenses from June is $80,000.
?Sales are on credit and are collected 70 percent in current period and 29 percent in the next period. June's sales were $3,000,000. Bad debts average 1 percent of sales.
?Selling and administrative expenses are paid monthly and total $450,000, including $40,000 of depreciation.

Required:

Prepare the following for July:

(1) Sales budget in dollars
(2) Purchases budget
(3) Cash budget
(4) Pro forma income statement

Solution Summary

Excel file contain:
(1) Sales budget in dollars
(2) Purchases budget
(3) Cash budget
(4) Pro forma income statement

$2.19