Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.

QUESTION

quot;One-more Coffee Co. (OCC) is in the process of preparing the budget for the third quarter of 2012. The following data has been gathered:

"One-more Coffee Co. (OCC) is in the process of preparing the budget for the third quarter of 2012. The following data has been gathered: Account balances as of June 30Cash $ 20,000 Accounts receivable 15,000 Inventory 47,250 Building and Equipment 200,000 Accounts payable -0- Recent and forecasted salesMay (actual sales) $ 75,000 June (actual sales) 80,000 July (budgeted sales) 82,000 August (budgeted) 90,000 September (budgeted) 100,000 October (budgeted) 112,000 Sales are 75% cash and 25% on credit. Credit amounts are all collected within the month after sale. OCC’s gross margin averages 40% of revenues. Operating expenses – all are paid before the end of the month.Salaries and wages $8,000 per month plus 5% of revenue as commissions Rent and property taxes $1,000 per month Other operating expenses 2% of revenues Depreciation $1,000 per month OCC has no minimum inventory requirement. Their policy is to purchase on the 15th of each month the amount needed for the next month’s expected sales. OCC Is negotiating the purchase of new equipment that will cost $127,000 and be installed in September. Terms are 50% to be paid in August and the rest in September. The minimum cash balance required is $20,000. If needed, cash is borrowed as of the beginning of the month and all repayments are made when possible at the end of the month. The interest rate charged on these short-term borrowings is 12% per year, payable at the end of the month. Both borrowings and repayments are made in multiples of $1,000. Management does not want to borrow more cash than is necessary for operations1. Prepare the following schedules and budget:•Cash Disbursements for operating expenses

Show more
LEARN MORE EFFECTIVELY AND GET BETTER GRADES!
Ask a Question