Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 8, Problem 12E
1.
To determine
the value of the collection in the month of July, August, September and October
Introduction: Budget is the evaluation of the revenue and the expense which is expected incur in the specified period.
1.
Expert Solution
Explanation of Solution
Total cash collection of the July August, September and December are $209,500, 217,500, 226,500 and $227,000.
Calculate the expected cash collection,
| Particulars | July | August | September | October |
| Sales | 210,000 | 230,000 | 220,000 | 240,000 |
| Collection | ||||
| 35% in month of sales | 73,500 | 80,500 | 77,000 | 84,000 |
| 65% in the month of following | 0 | 136,500 | 149,500 | 143,000 |
| Collection from | 136,000 | 0 | 0 | 0 |
| Total cash collection | 209,500 | 217,000 | 226,500 | 227,000 |
2.
a.
To determine
the value of the merchandise purchase for the quarter ended September
Introduction: Budget is the evaluation of the revenue and the expense which is expected incur in the specified period.
2.
a.
Expert Solution
Explanation of Solution
Formula to calculate the merchandise purchase for the quarter ended September,
Substitute, $41,400 for the closing inventory July, $39,600 for the closing inventory of August and $43,200 for the September
Working notes:
Calculation of merchandise purchase budget
| Particulars | July | August | September | October |
| Sales | 210,000 | 230,000 | 220,000 | 240,000 |
| Cost of goods sold (60%) | 126,000 | 138,000 | 132,000 | 144,000 |
| Less: Opening inventory | 62,000 | 41,400 | 39,600 | |
| Add: closing inventory(30% of the next month cost of goods sold) | 41,400 | 39,600 | 43,200 | |
b.
To determine
The value of the merchandise purchases
Introduction: Budget is the evaluation of the revenue and the expense which is expected incur in the specified period.
b.
Expert Solution
Explanation of Solution
Formula to calculate total cash disbursement for merchandise purchase for the quarter ended September,
Substitute, $113,200 for merchandise purchase in month July, $117,200for merchandise purchase in month of August and $135,800 for merchandise purchase in month September
Working notes:
| Particulars | July | August | September |
| Purchases | 105,400 | 136,200 | 135,200 |
| Cash payment (40%) | $42,160 | $54,480 | 54,080 |
| 60% on the following month | 0 | 63,240 | 81,720 |
| Payment of account payable in month of July | 71,100 | 0 | 0 |
| Total | 113,260 | 117,720 | 135,800 |
Calculate the purchase in the month of July,
Calculate the purchase in the month of August,
Calculate the purchase in the month of September,
3.
To determine
To prepare: Income statement of the company
Introduction: Budget is the evaluation of the revenue and the expense which is expected incur in the specified period.
3.
Expert Solution
Explanation of Solution
| Particulars | JulyAmount ($) | AugustAmount ($) | September Amount ($) |
| Sales | 210,000 | 230,000 | 220,000 |
| Cost of goods sold (60%) | 126,000 | 138,000 | 132,000 |
| Gross profit | 84,000 | 92,000 | 88,000 |
| Less: Selling & Administration expense | (60,000) | (60,000) | (60,000) |
| Less: Depreciation | (5,000) | (5,000) | (5,000) |
| Less: remaining expense | (55,000) | (55,000) | (55,000) |
| Net | (36,000) | (28,000) | (32,000) |
4.
To determine
To Prepare: Balance sheet of the company
Introduction: Budget is the evaluation of the revenue and the expense which is expected incur in the specified period.
4.
Expert Solution
Explanation of Solution
| Balance sheetas on September 31 | |
| Assets: | Amount
($) |
| Cash | 226,500 |
| Account receivable | 143,000 |
| Inventory | 62,000 |
| Plant and equipment, net of depreciation | 132,000 |
| Total assets | 563,500 |
| Liability and stockholder’ equity | |
| Account payable | 232,600 |
| Common stock | 327,000 |
| 3,900 | |
| Total liabilities and stockholder’s equity | 563,500 |
Working notes:
Calculate the retained earnings,
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Required information
[The following information applies to the questions displayed below.]
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar
year. The company's balance sheet as of June 30th is shown below:
Beech Corporation
Balance Sheet
June 30
Assets
Cash
Accounts receivable
Inventory
Plant and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 94,000
145,000
59,400
222,000
$520,400
$ 83,000
331,000
106,400
$ 520,400
Beech's managers have made the following additional assumptions and estimates:
1. Estimated sales for July, August, September, and October will be $330,000 $350,000, $340,000, and $360,000, respectively.
2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65%
in the month following the sale. All of the…
Required information [The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year.
The company's balance sheet as of June 30th is shown in the picture provided: Beech's managers have made the following additional assumptions and estimates: Estimated sales for July, August, September, and
October will be $360,000, $380,000, $370,000, and $390,000, respectively. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 35% in the month of sale and 65% in the
month following the sale. All of the accounts receivable at June 30 will be collected in July. Each month's ending inventory must equal 25% of the cost of next month's sales. The cost of goods sold is 60% of sales. The
company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of…
Dear Bartleby, can you please help with "calculations for cost of goods sold/operating expenses occured in the following problem, for March, April, May and June, thank you. Following are the budgeted income statements for the second quarter of 2019 for SeaTech Inc.:
April
May
June
Sales
$
112,000
$
136,000
$
152,000
Cost of goods sold*
76,800
91,200
100,800
Gross profit
$
35,200
$
44,800
$
51,200
Operating expenses†
17,600
20,000
21,600
Operating income
$
17,600
$
24,800
$
29,600
*Includes all product costs (i.e., direct materials, direct labor, and manufacturing overhead).†Includes all period costs (i.e., selling, general, and administrative expenses).The company expects about 40% of sales to be cash transactions. Of sales on account, 65% are expected to be collected in the first month after the sale is made, and 35% are expected to be collected in the second month after sale. Depreciation,…
Chapter 8 Solutions
Introduction To Managerial Accounting
Ch. 8 - What is a budget? What is budgetary control?Ch. 8 - Prob. 2QCh. 8 - What is meant by the term responsibility...Ch. 8 - What is a master budget? Briefly describe its...Ch. 8 - Why is the sales forecast the starting point in...Ch. 8 - “As a practical matter, planning and control mean...Ch. 8 - Prob. 7QCh. 8 - What is a self-imposed budget? What are the major...Ch. 8 - How can budgeting assist a company in planning its...Ch. 8 - Prob. 10Q
Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - The Excel worksheet form that appears below is to...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 2F15Ch. 8 - Prob. 3F15Ch. 8 - Prob. 4F15Ch. 8 - Morganton Company makes one product and it...Ch. 8 - Prob. 6F15Ch. 8 - Prob. 7F15Ch. 8 - Prob. 8F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Prob. 11F15Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Morganton Company makes one product and ¡t...Ch. 8 - Schedule of Expected Cash Collections LOB-2 Silver...Ch. 8 - Down Under Products, Ltd., of Australia has...Ch. 8 - Direct Materials Budget LOB-4 Three grams of musk...Ch. 8 - Direct Labor Budget LOB-5 The production manager...Ch. 8 - Manufacturing Overhead Budget L.08—6 The direct...Ch. 8 - Weller Company’s budgeted unit sales for the...Ch. 8 - Cash Budget LOB—8 Garden Depot is a retailer that...Ch. 8 - Gig Harbor is the wholesale distributor of a small...Ch. 8 - The management of Mecca copy, a photocopying...Ch. 8 - Production and Direct Materials Budgets LO8—,...Ch. 8 - Cash Budget Analysis LOB—8 A cash budget, by...Ch. 8 - Prob. 12ECh. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Sales and Production Budgets L08—2, L08—3 The...Ch. 8 - Direct Labor and Manufacturing Overhead Budgets...Ch. 8 - Direct Materials and Direct Labor Budgets LOB—4,...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Flows; Budgeted Income Statement and Balance...Ch. 8 - Cash Budget: Income Statement: Balance Sheet...Ch. 8 - Cash Budget; Income Statement: Balance Sheet;...Ch. 8 - Schedules of Expected Cash Collections and...Ch. 8 - Evaluating a Company’s Budget Procedures LOB—1...Ch. 8 - Prob. 23PCh. 8 - Cash Budget with Supporting Schedules L08-2,...Ch. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Completing a Master Budget LOB—2, LO8—4, LO8—7,...Ch. 8 - Prob. 30PCh. 8 - Completing a Master Budget LOB-2, LOB-4, LOB-7,...
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