Developing a Master Budget for a Merchandising Organization Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2010. PEYTON DEPARTMENT STORE Balance Sheet March 31, 2010 Assets Liabilities and Stockholders' Equity Cash $2,000 Accounts payable $26,000 Accounts receivable 25,000 Dividends payable 17,000 Inventory 30,000 Rent payable 1,000 Prepaid Insurance 2,000 Stockholders' equity 40,000 Fixtures 25,000 Total assets $84,000 Total liabilities and equity $84,000 Actual and forecasted sales for selected months in 2010 are as follows: Month Sales Revenue January $70,000 February 50,000 March 40,000 April 50,000 May 60,000 June 70,000 July 90,000 August 80,000 Monthly operating expenses are as follows: Wages and salaries $26,000 Depreciation 100 Utilities 1,000 Rent 1,000 Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent, and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1,000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $2,000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed. (a) Prepare a purchases budget for each month of the second quarter ending June 30, 2010. Peyton Department Store Monthly Purchase Budget Quarter Ending June 30, 2010 April May June Total Budgeted purchases $Answer $Answer $Answer $Answer (b) Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2010. Do not include borrowings. Peyton Department Store Schedule of Monthly Cash Receipts Quarter Ending June 30, 2010 April May June Total Total cash receipts $Answer $Answer $Answer $Answer (c) Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2010. Do not include repayments of borrowings. Peyton Department Store Schedule of Monthly Cash Disbursements Quarter Ending June 30, 2010 April May June Total Total cash disbursements $Answer $Answer $Answer $Answer (d) Prepare a cash budget for each month of the second quarter ending June 30, 2010. Include budgeted borrowings and repayments. Peyton Department Store.

1. Developing a Master Budget
for a Merchandising Organization
Peyton Department Store prepares budgets quarterly. The
following information is available for use in planning the
second quarter budgets for 2010.
PEYTON DEPARTMENT STORE
Balance Sheet
March 31, 2010
Assets
Liabilities and Stockholders' Equity
Cash
$2,000
Accounts payable
$26,000
Accounts receivable
25,000
Dividends payable
17,000
Inventory
30,000
Rent payable
1,000
Prepaid Insurance
2,000
Stockholders' equity
40,000
Fixtures
25,000
Total assets
$84,000
Total liabilities and equity
$84,000

2. Actual and forecasted sales for selected months in 2010 are as
follows:
Month
Sales Revenue
January
$70,000
February
50,000
March
40,000
April
50,000
May
60,000
June
70,000
July
90,000
August
80,000
Monthly operating expenses are as follows:
Wages and salaries
$26,000
Depreciation
100
Utilities
1,000
Rent
1,000
Cash dividends of $17,000 are declared during the third month
of each quarter and are paid during the first month of the
following quarter.

3. Operating expenses, except insurance, rent, and depreciation
are paid as incurred. Rent is paid during the following month.
The prepaid insurance is for five more months.
Cost of goods sold is equal to 50 percent of sales. Ending
inventories are sufficient for 120 percent of the next month's
sales. Purchases during any given month are paid in full during
the following month.
All sales are on account, with 50 percent collected during the
month of sale, 40 percent during the next month, and 10 percent
during the month thereafter.
Money can be borrowed and repaid in multiples of $1,000 at an
interest rate of 12 percent per year. The company desires a
minimum cash balance of $2,000 on the first of each month. At
the time the principal is repaid, interest is paid on the portion of
principal that is repaid. All borrowing is at the beginning of the
month, and all repayment is at the end of the month. Money is
never repaid at the end of the month it is borrowed.
(a) Prepare a purchases budget for each month of the second
quarter ending June 30, 2010.
Peyton Department Store
Monthly Purchase Budget
Quarter Ending June 30, 2010
April
May
June
Total
Budgeted purchases
$Answer
$Answer
$Answer

4. $Answer
(b) Prepare a cash receipts schedule for each month of the
second quarter ending June 30, 2010. Do not include
borrowings.
Peyton Department Store
Schedule of Monthly Cash Receipts
Quarter Ending June 30, 2010
April
May
June
Total
Total cash receipts
$Answer
$Answer
$Answer
$Answer
(c) Prepare a cash disbursements schedule for each month of the
second quarter ending June 30, 2010. Do not include
repayments of borrowings.
Peyton Department Store
Schedule of Monthly Cash Disbursements
Quarter Ending June 30, 2010
April
May
June

5. Total
Total cash disbursements
$Answer
$Answer
$Answer
$Answer
(d) Prepare a cash budget for each month of the second quarter
ending June 30, 2010. Include budgeted borrowings and
repayments.
Peyton Department Store
Monthly Cash Budget
Quarter Ending June 30, 2010
April
May
June
Total
Cash balance, beginning
$Answer
$Answer
$Answer
$Answer
Receipts
Answer
Answer

6. Answer
Answer
Disbursements
Answer
Answer
Answer
Answer
Excess receipts over disb.
Answer
Answer
Answer
Answer
Balance before borrowings
Answer
Answer
Answer
Answer
Borrowings
Answer
Answer

7. Answer
Answer
Loan repayments
Answer
Answer
Answer
Answer
Cash balance, ending
$Answer
$Answer
$Answer
$Answer
(e) Prepare an income statement for each month of the second
quarter ending June 30, 2010.
Peyton Department Store
Budgeted Monthly Income Statements
Quarter Ending June 30, 2010
April
May
June
Total
Sales

8. $Answer
$Answer
$Answer
$Answer
Cost of sales
Answer
Answer
Answer
Answer
Gross profit
Answer
Answer
Answer
Answer
Operating expenses:
Wages and salaries
Answer
Answer

9. Answer
Answer
Depreciation
Answer
Answer
Answer
Answer
Utilities
Answer
Answer
Answer
Answer
Rent
Answer
Answer
Answer
Answer
Insurance
Answer
Answer

10. Answer
Answer
Interest
Answer
Answer
Answer
Answer
Total expenses
Answer
Answer
Answer
Answer
Net income
$Answer
$Answer
$Answer
$Answer
(f) Prepare a budgeted balance sheet as of June 30, 2010.
Peyton Department Store
Budgeted Balance Sheet
June 30, 2010

11. Assets
Liabilities and Equity
Cash
$Answer
Merchandise payable
$Answer
Accounts receivable
Answer
Dividend payable
Answer
Inventory
Answer
Rent payable
Answer
Prepaid insurance
Answer
Loans payable
Answer
Fixtures
Answer
Interest payable
Answer

12. Total assets
$Answer
Stockholders' equity
Answer
Total liab. & equity
$Answer
0
0
0
0
0
0
0
0
0
0

13. 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

14. 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

15. 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

16. 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

17. 0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

18. 0
Niloc Retseh
ENG 102-010
Professor Hester
Winter 2013 — Evaluation Paper
U. Montana’s Graduate Writing Program: The Last Best Place
In early 1989, while living in the suburbs of North
Vancouver, British Columbia, my then-wife, Kim, finally grew
tired of hearing my nightly complaints about my publishing
sales job and my frustrated writerly ambitions. Kimgrew so
tired that not only didshe secretly send away to a half-dozen
U.S. graduate schools for their applications, but once those
applicationsarrived, Kimforced me to sit at the kitchen table for
six successive nights and fill those applications out. But when
the timecame to mail those applications, wehesitated. For,
unfortunately, each school’s applicationrequired a fee of $100.
Struggling with two young children on my paltry income, Ihad
to narrow the choice to one or two. To do so, Iwould first have
to research and rank each of them.
To do that, I first had to settle on some criteria for judging the
schools. With Kim’s help and earnest input, wedecided on three
important criteria. First, Iwanted to attend a program with
renowned authors as professors. Those author/professorsdidn’t
have to be world-famous authors whoguest-appeared on the
Tonight show, but theyneeded to be renowned enough that when
theychampioned my book (its content back then still mysterious
and amorphous), their editorswould listen. Next, weneeded a
family-friendly place. As mentioned earlier, wehad two
children: boys, three years and two. Back in 1989, many regions
of America still seethed with violent crime, and Kim and Iwould
not only be risking our children’s safety, but also, coming from
a quiet suburban town in Canada, wewould be risking our
sanity. Finally, Isought a supportive environment not only of

19. fellow student writers but student writers of my age, because of
all the crafts and occupations, writingis the loneliest and easiest
to abandon. And if Iabandoned my dream, Iwould have to
resume my nightmare.
Of the half-dozen graduate schools under consideration, U.
Montana’s programbest met the first criteria. In fact
Montanaexceeded criteria #1. Montana’s cataloguelisted on its
faculty page William Kittredge, Beverley Lowry, Richard Hugo
and James Welch. I’d heard only of James Welch. Indeed,
Iread and loved his sombre if not sober Winter in the Blood. As
for the other faculty, in the pre-Amazon late 80s, Idecided to
visit my local branch of the North Vancouver Public Library (as
opposed to the main downtown branch) and see if the library’s
card catalogueheld any of U-of-M faculty titles. Iwas
pleasantly surprised for my smallish branchdid indeed hold their
books: Kittredge’s book of short stories, We Are Not In This
Together; Lowry’s Daddy’s Girl; and not only the poet Richard
Hugo’s murder mystery, Death and the Good Life, but also his
book of poems The Lady in Kicking Horse Reservoir which
earned nomination for a National Book Award and
whichcontained the fine poem, “Degrees of Gray in
Philipsburg.” Unfortunately, Hugowas dead. But, Montanahad
replaced the irreplaceable Hugo with a series of visiting poets,
one of whom, Mark Strand, had served as the U.S. Poet
Laureate. Truly, U. Montanawon on this first criteria by a clear
margin.
Next, the family-friendly criteria: again U. Montana, tucked
away in the Rockies in the medium-sized town of Missoula, won
outright. Back then, in the early 90s, we not only lacked
access to Amazon.com, welacked access to the entire internet.
But if wecould have accessed the internet back then, Iwould
have Bingled “Missoula crime rates” and discovered in my
search results neighborhoodscout.com. At that site, I would
have learned how Missoulaboasted a violent crime rate
thatstood at 30% less than U.S. crime rates nationally.
HadIbeen able to further search the web, Iwould have landed on

20. the FBI website whichwould have confirmed the national
statistics that neighborhoodscoutcited. From those FBI
statistics, Icould reasonably infer that neighborhoodscout also
cited accurate figures for Missoula itself. However, back in
those internet-lacking early 90s, Iresorted to buying a Sunday
subscription to the Missoulian newspaper, and Kim and I
regularly monitored the “City” section for crime reports. Those
reportswould have substantiated the internet data welacked.
However, for even further substantiation, Itelephoned the
Missoula police department and spoke to the desk sergeant. The
sergeantdid indeed further confirm what Kim and Ihad intuited
from the Missoulian: that Missoulaoffered "the safest urban
environment in Montana — one of the safest states in the lower
forty-eight."
Finally, Igathered data for my final criteria: a supportive
environment with writers my own age. This criteria too, U
Montanascored highly on, the details of which Ifound out by
sheer coincidence. For when Ihad spoken with the desk
sergeant about Missoula's crime rate, he heard that Iwas moving
to possibly attend U of M's graduate writing program. The
sergeantinformed me that Missoula's police captainwas a
graduate of that program and had had several novels published.
The Captain's namewas Robert Sims Reid, and hehad authored
four crime mysteries: The Red Corvette, Big Sky Blues,
Benediction and Cupid, the lasthaving been translated into
French of all things. When Itracked him down by telephone in
his office a few days later, Captain Reidaffirmed and validated
my third criteria. "Well, when Iattended a few years back,"
hetold me, "I'd say about a third to a half of the students were
non-trads with the ink dry on their BA's for at least a decade."
Iasked him if those numbersdiffered between the poetry strand
and the fiction strand, and heenlightened me: "UM's
programdoesn't officially have separate strands for poetry and
fiction. Most students readily and eagerly cross over. But on
sheer anecdotal evidence," hesaid, "probably the poetsrange on
the younger side." "Angry young men?" Ijoked. "And even

21. angrier older men," hequipped. "Angrier" and "older" In short,
Iwould fit right in.
True, Kim and Iremained concerned that Missoula’s school
systemmight not measure up to the wonderful North Vancouver
system. So Kimtelephoned Missoula's School District 11 and a
few days later, wereceived several pamphlets. One of the
pamphlets, "Missoula Kindergarten Honored Nationally!"
detailed how the U.S. Department of Educationhad bestowed an
award on Rattlesnake Elementary School. Wehad another
concern though. In the Missoulian newspaper, weread
bothersome stories of mountain lions occasionally prowling the
streets at night. But on the fringes of our North Vancouver
neighbourhood, black bears often staggered into the back yards
and even kitchens of the houses. Indeed, when we first moved
to North Vancouver back in 1987, Iread in a North Shore News
article, how the year before, RCMP officershad shot and killed
37 black bears whohad menaced people, even children (Hanson
37). Comparatively, our then-current black bear menacepaled
Missoula's one or two mountain lion sightings. Even so, Kim
and I both resolved to not wander Missoula’s streets alone and
after dark.
In the end, weagreed unanimously: U.M.-Missoula. And the
authors, the town and my fellow studentsturned out to validate
our choice. First, author and U.M. Professor William
KittredgesuggestedIsend my manuscript to New York literary
agent Patricia Van der Leun whosold it to publishing's eminence
grise Jack Shoemaker. Secondly, in the 14 years Iended up
living there in Missoula, Iwitnessed only one violent act. That
violent actoccurred when a drunken white student with
dreadlocks bit the fingertip off my good friend, bartender and
fellow author, Grenadian Claude Alick while Claudeattempted
to bounce the student. Finally, in addition to Claude, Imet
several other men and women — David Allen Cates, Peggy
Christian, Jeff Hull, Tom Groneberg — U.M students who also
became authors and, much more importantly, my life-long and
cherished friends, both in that last best place and through the

22. years since I've moved on.
Works Cited
"Crime in the United States." The FBI Federal Bureau of
Investigation. U.S. Department of Justice, n.d. Web. 21 Feb
2013
"Crime Rates for Missoula, MT." Neighborhoodscout. Location
Inc., n.d. Web. 21 Feb 2013.
Hanson, David. "In Trash Fight, Some Progress." North Shore
News [North and West Vancouver] 10 Oct 1987, Sunday. Print.
"Missoula Kindergarten Honored Nationally." City of Missoula.
Missoula School District 11.
Missoula Police Desk Sergeant. Telephone Interview. Jun 1989.
Sims Reid, Cpt. Robert. Telephone Interview. Jun 1989.
Classic evaluation
1- Top load * * title
2- Broader context (why are we here)
3- State a specific set of criteria and why chose those criteria
4- Express a cleat judgment of each criteria in turn and support
each judgment in turn documented evidence verifiable facts,
expert witness testimony.
5- Address the contrary
6- Restate your overall judgment the revisit in turn, each of
your criteria briefly summarizing in turn, your supporting data.
7- End gracefully by revisiting your beginning