Sunteți pe pagina 1din 12

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter !

PROBLEM 8-1A Schedule of Expected Cash Collections; Cash Budget (LO2, LO8)
CHECK FIGURE (1) July: $268,500 (2) July 31 cas !ala"c#: $11,000

Herbal Care Corp., a distributor of herb-based sunscreens, is ready to begin its third quarter, in which peak sales occur. The company has requested a $2 , , ! -day loan from its bank to help meet cash requirements during the quarter. "ince Herbal Care has e#perienced difficulty in paying off its loans in the past, the loan officer at the bank has asked the company to prepare a cash budget for the quarter. $n response to this request, the following data ha%e been assembled& a. 'n (uly ), the beginning of the third quarter, the company will ha%e a cash balance of $2*, . b. +ctual sales for the last two months and budgeted sales for the third quarter follow& $2 ,ay -actual. (une -actual. (uly -budgeted. +ugust -budgeted. "eptember -budgeted. 2/ , 0/ , 01/, 22 , ,

2ast e#perience shows that 2/3 of a month4s sales are collected in the month of sale, 1 3 in the month following sale, and 03 in the second month following sale. The remainder is uncollectible. c. 5udgeted merchandise purchases and budgeted e#penses for the third quarter are gi%en below& July $2) , ,erchandise purchases "alaries and wages +d%ertising 8ent payments 9epreciation /2, 7/, 7, 1, August $2)6,1/ /*, 12, 7, 1, Septembe r $)2 ,0)0 /0, * , 7, 1,

,erchandise purchases are paid in full during the month following purchase. +ccounts payable for merchandise purchases on (une 0 , which will be paid during (uly, total $)/1,/ . d. :quipment costing $2), will be purchased for cash during (uly. e. $n preparing the cash budget, assume that the $2 , loan will be made in (uly and repaid in "eptember. $nterest on the loan will total $7 . Required: ). 2repare a schedule of e#pected cash collections for (uly, +ugust, and "eptember and for the quarter in total. 2. 2repare a cash budget, by month and in total, for the third quarter. 0. $f the company needs a minimum cash balance of $) , to start each month, can the loan be repaid as planned; :#plain.

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8- A P!oduction and Pu!chases Budgets (LO3, LO$)
CHECK FIGURE (1) July: 3%,250 u"&'s

2earl 2roducts <imited of "hen=hen, China, manufactures and distributes toys throughout "outh :ast +sia. :ach unit of "upermi#, one of the company4s products, requires * cc -cubic centimeters. of sol%ent H0 . The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of "upermi# occur. To keep production and sales mo%ing smoothly, the company has the following in%entory requirements& a. The finished goods in%entory on hand at the end of each month must be equal to 2, units of "upermi# plus 2/3 of the ne#t month4s sales. The finished goods in%entory on (une 0 is budgeted to be )), units. b. The raw materials in%entory on hand at the end of each month must be equal to * 3 of the following month4s production needs for raw materials. The raw materials in%entory on (une 0 is budgeted to be /!,7 cc of sol%ent H0 . c. The company maintains no work in process in%entories. + sales budget for "upermi# for the last si# months of the year follows. Budgeted Sales in Units (uly 07, +ugust *), "eptember *!, 'ctober 02, >o%ember 2*, 9ecember )6, Required: ). 2repare a production budget for "upermi# for the months (uly?'ctober. 2. :#amine the production budget that you prepared in -). abo%e. @hy will the company produce more units than it sells in (uly and +ugust, and fewer units than it sells in "eptember and 'ctober; 0. 2repare a budget showing the quantity of sol%ent H0 to be purchased for (uly, +ugust, and "eptember, and for the quarter in total.

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-"A Cash Budget; #nco$e State$ent; Balance Sheet (LO$, LO8, LO(, LO10)
CHECK FIGURE (1) )ay 31 cas !ala"c#: $1$,(00 (2) *#' &"c+,#: $(00

,inden Company is a wholesale distributor of premium :uropean chocolates. The company4s balance sheet as of +pril 0 is gi%en below& Minden Company Balance Sheet April 30 Assets Cash +ccounts recei%able, customers $n%entory 5uildings and equipment, net of depreciation Total assets Liabilities and Stockholders Equity +ccounts payable, suppliers >ote payable Capital stock, no par 8etained earnings Total liabilities and stockholders4 equity

6, /2, 26, )!2, $26 ,

$ /0, )1, )1 , * , $26 ,

The company is in the process of preparing budget data for ,ay. + number of budget items ha%e already been prepared, as stated below& a. "ales are budgeted at $22 , for ,ay. 'f these sales, $)0 , will be for cashA the remainder will be credit sales. 7 3 of a month4s credit sales are collected in the month the sales are made, and the remainder are collected in the following month. +ll of the +pril 0 recei%ables will be collected in ,ay. b. 2urchases of in%entory are e#pected to total $)* , during ,ay. These purchases will all be on account. 1/3 of all purchases are paid for in the month of purchaseA the remainder is paid in the following month. +ll of the +pril 0 accounts payable to suppliers will be paid during ,ay. c. The ,ay 0) in%entory balance is budgeted at $06, . d. 'perating e#penses for ,ay are budgeted at $67, , e#clusi%e of depreciation. These e#penses will be paid in cash. 9epreciation is budgeted at $0, for the month. e. The note payable on the +pril 0 balance sheet will be paid during ,ay, with $) in interest. -+ll of the interest relates to ,ay.. f. >ew refrigerating equipment costing $6, will be purchased for cash during ,ay. g. 9uring ,ay, the company will borrow $* , from its bank by gi%ing a new note payable to the bank for that amount. The new note will be due in one year. Required: ). 2repare a cash budget for ,ay. "upport your budget with schedules showing budgeted cash receipts from sales and budgeted cash payments for in%entory purchases. 2. 2repare a budgeted income statement for ,ay. Bse the traditional income statement format. 0. 2repare a budgeted balance sheet as of ,ay 0).

"

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-%A #nteg!ation of the Sales& P!oduction& and Pu!chases Budgets (LO2, LO3, LO$)
CHECK FIGURE (2) July: $$,000 u"&'s

,ilo Company manufactures beach umbrellas. The company is now preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation& a. The ,arketing 9epartment has estimated sales as follows for the remainder of the year -in units.& * , (uly 7 , +ugust */, "eptember 9ecember >o%ember 2/, 'ctober 0 , 0/,

The selling price of the beach umbrellas is $)6 per unit. b. +ll sales are on account. 5ased on past e#perience, sales are collected in the following pattern& 2/3 in the month of sale 1 3 in the month following sale /3 uncollectible "ales for (une totaled $72/, . c. The company maintains finished goods in%entories equal to 2 3 of the following month4s sales. This requirement will be met at the end of (une. d. :ach beach umbrella requires / metres of Cilden, a material that is sometimes hard to get. Therefore, the company requires that the in%entory of Cilden on hand at the end of each month be equal to 2/3 of the following month4s production needs. The in%entory of Cilden on hand at the beginning and end of the quarter will be& //, (une 0 "eptember 0 ; metres metres

e. The Cilden costs $).2 per foot. * 3 of a month4s purchases of Cilden are paid for in the month of purchaseA the remainder is paid for in the following month. The accounts payable on (uly ) for purchases of Cilden during (une will be $)0), . Required: ). 2repare a sales budget, by month and in total, for the third quarter. -"how your budget in both units and dollars.. +lso prepare a schedule of e#pected cash collections, by month and in total, for the third quarter. 2. 2repare a production budget for each of the months (uly-'ctober. 0. 2repare a materials purchases budget for Cilden, by month and in total, for the third quarter. +lso prepare a schedule of e#pected cash payments for Cilden, by month and in total, for the third quarter.

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-'A Cash Budget (ith Suppo!ting Schedules (LO2, LO$, L08)
CHECK FIGURE (2a) )ay -u.c as#s: $5$6,000 (3) Ju"# 30 cas !ala"c#: $%$,815

Carden "ales, $nc., sells garden supplies. ,anagement is planning its cash needs for the second quarter. The company usually has to borrow money during this quarter to support peak sales of lawn care equipment, which occur during ,ay. The following information has been assembled to assist in preparing a cash budget for the quarter& a. 5udgeted monthly income statements for +pril?(uly are& April $/ , "ales Cost of goods sold Cross margin <ess operating e#penses& "elling e#pense +dministrati%e e#penseD Total e#penses >et operating income D$ncludes $)/, 0/ , )/ , 1/, 0/, )) , $* , May $6 , /7 , 2* , ) 6, 06, )*7, $ !*, June $7 , *2 , )6 , 1!, 01, ))7, $ 7*, July $// , 06/, )7/, 1*, 06, ))2, $ /0,

depreciation each month.

b. "ales are 2/3 for cash and 1/3 on account. c. "ales on account are collected o%er a three-month period as follows& /3 collected in the month of saleA 7 3 collected in the first month following the month of saleA and the remaining 0/3 collected in the second month following the month of sale. Eebruary4s sales totaled $* , , and ,arch4s sales totaled $*/ , . d. $n%entory purchases are paid for as follows& * 3 of a month4s in%entory purchases are paid for in the month of purchaseA the remaining 7 3 are paid in the following month. +ccounts payable at ,arch 0) for in%entory purchases during ,arch total $)!),) . e. +t the end of each month, in%entory must be on hand equal to ) 3 of the cost of the merchandise to be sold in the following month. The merchandise in%entory at ,arch 0) is $0/, . f. 9i%idends of $0/, will be declared and paid in +pril. g. <and costing $)2, will be purchased for cash in ,ay. h. The cash balance at ,arch 0) is $07, A the company must maintain a cash balance of at least $0 , at all times. i. The company can borrow from its bank as needed to bolster the Cash account. 5orrowings and repayments must be in multiples of $), . +ll borrowings take place at the beginning of a month, and all repayments are made at the end of a month. The annual interest rate is )23. Compute interest on whole months -)F)2, 2F)2, and so forth.. Required: ). 2repare a schedule of e#pected cash collections from sales for each of the months +pril, ,ay, and (une, and for the quarter in total. 2. 2repare the following for merchandise in%entory& a. +n in%entory purchases budget for each of the months +pril, ,ay, and (une. b. + schedule of e#pected cash disbursements for in%entory for each of the months +pril, ,ay, and (une, and for the quarter in total. 0. 2repare a cash budget for the third quarter, by month as well as in total for the quarter. "how borrowings from the company4s bank and repayments to the bank as needed to maintain the minimum cash balance.

'

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-)A Cash Budget (ith Suppo!ting Schedules (LO2, LO$, LO%, LO8)
CHECK FIGURE (2) F&.s' /ua.'#. "#' -ay,#"'s: $80,000 (3) F&.s' /ua.'#. #"0&"1 cas !ala"c#: $2(,225

@este# 2roducts is a wholesale distributor of industrial cleaning products. @hen the treasurer of @este# 2roducts approached the company4s bank in late 2 * seeking short-term financing, he was told that money was %ery tight and that any borrowing o%er the ne#t year would ha%e to be supported by a detailed statement of cash receipts and disbursements. The treasurer also was told that it would be %ery helpful to the bank if borrowers would indicate the quarters in which they would need funds, as well as the amounts that would be needed, and the quarters in which repayments could be made. "ince the treasurer is unsure as to the particular quarters in which the bank financing will be needed, he has assembled the following information to assist in preparing a detailed cash budget& a. 5udgeted sales and merchandise purchases for the year 2 /, as well as actual sales and purchases for the last quarter of 2 *, are& Sales 2 *& $21/, Eourth quarter actual 2 /& Eirst quarter estimated "econd quarter estimated Third quarter estimated Eourth quarter estimated $)7/,0 26 , 0* , 0 , 21/, )1),7 2 ),7 )16,/ )7/,0 Merchandise Purchases

b. The company normally collects 7 3 of a quarter4s sales before the quarter ends and another 0/3 in the following quarter. The remainder is uncollectible. This pattern of collections is now being e#perienced in the 2 * fourth-quarter actual data. c. 1/3 of a quarter4s merchandise purchases are paid for within the quarter. The remainder is paid in the following quarter. d. 'perating e#penses for the year 2 / are budgeted quarterly at $07, plus 2 3 of sales. 'f the fi#ed amount, $)2, each quarter is depreciation. e. The company will pay $/, in di%idends each quarter. f. <and purchases of $0/, will be made in the second quarter, and purchases of $2/, will be made in the third quarter. These purchases will be for cash. g. The Cash account contained $2 , at the end of 2 *. The treasurer feels that this represents a minimum balance that must be maintained. h. +ny borrowing will take place at the beginning of a quarter, and any repayments will be made at the end of a quarter at an annual interest rate of ) 3. $nterest is paid only when principal is repaid. +ll borrowings and all repayments of principal must be in round $), amounts. $nterest payments can be in any amount. -Compute interest on whole months, e.g., )F)2, 2F)2.. i. +t present, the company has no loans outstanding. Required: ). 2repare the following by quarter and in total for the year 2 /& a. + schedule of e#pected cash collections. b. + schedule of budgeted cash disbursements for merchandi=e purchases. 2. Compute the e#pected cash payments for operating e#penses, by quarter and in total, for the year 2

/.

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! 0. 2repare a cash budget, by quarter and in total, for the year 2 /. "how clearly in your budget the quarter-s. in which borrowing will be necessary and the quarter-s. in which repayments can be made, as requested by the company4s bank.

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-*A Co$p!ehensi+e Maste! Budget (LO2, LO$, LO%, L08, LO(, LO10)
CHECK FIGURE (2a) F#!.ua.y -u.c as#s: $186,600 ($) F#!.ua.y #"0&"1 cas !ala"c#: $25,560

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data ha%e been assembled to assist in preparation of the master budget for the first quarter& a. +s of 9ecember 0) -the end of the prior quarter., the company4s general ledger showed the following account balances& Debits Credits $ 06, Cash +ccounts 8ecei%able )!7, $n%entory //,6 2roperty and :quipment -net. 2!/, +ccounts 2ayable $ 62, Capital "tock * , ) 2,6 8etained :arnings $/6*,6 $/6*,6 b. +ctual sales for 9ecember and budgeted sales for the ne#t four months are as follows& $26 , 9ecember -actual. (anuary Eebruary ,arch +pril 0) 02 2! 27 , , , ,

c. "ales are 0 3 for cash and 1 3 on credit. +ll payments on credit sales are collected in the month following sale. The accounts recei%able at 9ecember 0) are a result of 9ecember credit sales. d. The company4s gross profit margin is * 3 of sales. e. ,onthly e#penses are budgeted as follows& salaries and wages, $22, per month& ad%ertising, $/2, per monthA shipping, 23 of salesA other e#pense, 63 of sales. 9epreciation for the quarter will be $26, . +t the end of each month, in%entory is to be on hand equal to 0 3 of the following month4s sales needs, stated at cost. g. * 3 of a month4s in%entory purchases are paid for in the month of purchaseA the remainder is paid for in the following month. h. 9uring Eebruary, the company will purchase land for $2 , cash. 9uring ,arch, land will be purchased for cash at a cost of $)/, . i. 9uring (anuary, the company will declare and pay $/ , in cash di%idends. G. The company must maintain a minimum cash balance of $2/, . +n open line of credit is a%ailable at a local bank for any borrowing that may be needed during the quarter. +ll borrowing is done at the beginning of a month, and all repayments are made at the end of a month. 5orrowing and repayment of principal must be in multiples of $), . $nterest is paid only at the time of payment of principal. The annual interest rate is )23. -Eigure interest on whole months, e.g., )F)2, 2F)2.. Required: Bsing the data abo%e, complete the following statements and schedules for the first quarter& ). "chedule of e#pected cash collections&

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! January $ !0, Cash sales )!7, Credit sales $26!, Total cash collections 2. a. $n%entory purchases budget& January $)67, 5udgeted cost of goods sold /1,7 +dd desired ending in%entory Total needs <ess beginning in%entory $)61,6 8equired& purchases DEor (anuary sales& $0) , H$)!2, I 0 3 J $/1,7 sales I 7 3 cost ratio J $)67, H 2*0,7 //,6 Februar y D $)!2, Marc h uarter February March uarter

b. "chedule of cash disbursements for purchases& January $ 62, 9ecember purchases (anuary purchases -$)61,6 . Eebruary purchases ,arch purchases Total cash disbursements for purchases 1/,)2 Februar y Marc h uarter $62, )61,6

$))2,76

$)/1,)2

0. "chedule of cash disbursements for e#penses& January $ 22, "alaries and wages +d%ertising "hipping 'ther e#penses Total cash disbursements for operating e#penses *. Cash budget& January $ 06, Februar y Marc h uarter /2, 7,2 2*,6 $) /, Februar y Marc h uarter

Cash balance, beginning

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! +dd cash collections 26!, Total cash a%ailable 021, <ess disbursements& 2urchases of in%entory )/1,)2 'perating e#penses ) /, 2urchases of land Cash di%idends / , Total disbursements 0)2,)2 :#cess -deficiency. of cash )*,66 Einancing& :tc. /. 2repare an income statement for the quarter ending ,arch 0) as shown in "chedule ! in the chapter. 7. 2repare a balance sheet as of ,arch 0).

1-

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! PROBLEM 8-8A Co$p!ehensi+e Maste! Budget (LO2, LO$, LO%, LO8, LO(, LO10)
CHECK FIGURE (2) )ay -u.c as#s: $52,6$0 ($) )ay 31 cas !ala"c#: $5,600

The following are selected data relating to the operations of "hilow Company, a wholesale distributor& Current assets as of ,arch 0)& Cash +ccounts 8ecei%able $n%entory 5uildings and :quipment -net. +ccounts 2ayable Capital "tock 8etained :arnings a. Cross profit is 0 3 of sales. b. +ctual and budgeted sales data& ,arch -actual. +pril ,ay (une (uly $1 , 12, 10, 6*, 6 ,

$ ) ,/ 2), ) , 6 )* , 07,/ * , ) /, 6

c. "ales are 1 3 for cash and 0 3 on credit. Credit sales are collected in the month following sale. The accounts recei%able at ,arch 0) are the result of ,arch credit sales. d. +t the end of each month, in%entory is to be on hand equal to 2 3 of the following month4s sales needs, stated at cost. e. 2/3 of a month4s in%entory purchases are paid for in the month of purchaseA the remainder is paid for in the following month. The accounts payable at ,arch 0) are a result of ,arch purchases of in%entory. f. ,onthly e#penses are as follows& salaries and wages $)2,/ A rent, $0,7 A other e#penses -e#cluding depreciation., 63 of sales. These e#penses are paid monthly. 9epreciation is $), per month and includes depreciation on new assets. g. :quipment costing $!, will be purchased for cash in +pril. G. The company must maintain a minimum cash balance of $/, . +n open line of credit is a%ailable at a local bank. +ll borrowing is done at the beginning of a month, and all repayments are made at the end of a monthA borrowing must be in multiples of $), . The annual interest rate is )23. $nterest is paid only at the time of repayment of principalA figure interest on whole months -)F)2, 2F)2, and so forth.. Required: Bsing the abo%e data& ). Complete the following schedule& Schedule o! "#pected Cash Collections April May June Cash sales $/ ,* Credit sales 2), Total collections $1),*

uarter

11

Introduction to Managerial Accounting, Canadian Edition, by Garrison, Noreen, Kalagnanam, Vaidyanathan Alternate Problems-Set A, Cha ter ! 2. Complete the following& $n%entory Purchases Budget April May June 5udgeted cost of goods soldD $/ ,* $/),) +dd desired ending in%entoryH ) ,22 Total needs 7 ,72 <ess beginning in%entory ) , 6 8equired& purchases $/ ,/* DEor +pril sales& $12, sales I 1 3 cost ratio J $/ ,* H$/),) I 2 3 J $) ,22 Schedule o! "#pected Cash Disbursements&Purchases April May June ,arch purchases $07,/ +pril purchases )2,70/ $01,! / ,ay purchases (une purchases Total disbursements $*!,)0/ 0. Complete the following& Schedule o! "#pected Cash Disbursements&'perating "#penses April May June uarter "alaries and wages $)2,/ 8ent 0,7 'ther e#penses /,17 Total disbursements $2),67 *. Complete the following cash budget& Cash Budget April $) ,/ 1),* 6),! *!,)0/ 2),67 !, 1!,!!/ ),! /

uarter

uarter $07,/ / ,/*

May

June

uarter

Cash balance, beginning +dd cash collections Total cash a%ailable <ess cash disbursements& Eor in%entory Eor e#penses Eor equipment Total disbursements :#cess -deficiency. of cash Einancing& :tc.

/. 2repare an income statement for the quarter ending (une 0 . -Bse the functional format in preparing your income statement, as shown in "chedule ! in the te#t.. 7. 2repare a balance sheet as of (une 0 .

S-ar putea să vă placă și