acct 350 managerial acct

7/23/2019 Acct 350 Managerial Acct

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Student Name:Class:

April May June Quarter 1a. Sales budget:

Budgeted sales in units 35,000 45,000 6,000 140,000Selling price per unit x $8 x $8 x $8 x $8Total sales 280,000$ 360,000$ 480,000$ 1,120,000$

Correct! Correct! Correct! Correct!

1b. Schedule of expected cash collections:

February sales 48,000$ 48,000$March sales 112,000 56,000 168,000

April sales 70,000 140,000 70,000$ 280,000May sales 90,000 180,000 270,000

June sales 120,000 120,000Total cash collections 230,000$ 286,000$ 370,000$ 886,000$


1c. Merchandise purchases budget:

Budgeted sales in units 35,000 45,000 60,000 140,000Add budgeted ending inventory 40,500 54,000 36,000 36,000Total needs 75,500 99,000 96,000 176,000

Less beginning inventory (31,500) (40,500) (54,000) (31,500)Required unit purchases 44,000 58,500 42,000 144,500Unit cost x $5 x $5 x $5 x $5Required dollar purchases 220,000$ 292,500$ 210,000$ 722,500$


1d. Budgeted cash disbursements for merchandise purchases:

March purchases 85,750$ 85,750$April purchases 110,000 110,000$ 220,000May purchases 146,250 146,250$ 292,500

June purchases 105,000 105,000Total cash payments 195,750$ 256,250$ 251,250$ 703,250$


2.

April May June Quarter

Cash balance, beginning 14,000$ 10,250$ 10,000$ 14,000$Add receipts from customers 230,000 286,000 370,000 886,000

Total cash available 244,000 296,250 380,000 900,000Less disbursements:

Purchase of inventory 195,750 256,250 251,250 703,250

Sales commissions 35,000 45,000 60,000 140,000Salaries and wages 22,000 22,000 22,000 66,000Utilities 14,000 14,000 14,000 42,000

Miscellaneous 3,000 3,000 3,000 9,000Dividends paid 12,000 - - 12,000Land purchases - 25,000 - 25,000

Total disbursements 281,750 365,250 350,250 )Excess (deficiency) of receipts

over disbursements (37,750) (69,000) 29,750 (97,250)Financing:

Borrowings 48,000 79,000 - 127,000Repayments - - (16,000) (16,000)Interest - - (3,020) (3,020)

Total financing 48,000 79,000 (19,020) 107,980Cash balance, ending 10,250$ 10,000$ 10,730$ 10,730$


ACC 350 Managerial Accounti

Michael Buckmaster

CRAVAT SALES COMPANY

Budgets


For the Three Months Ending June 30

Cash Budget

Case 08-29


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Student Name:Class: ACC 350 Managerial Accounti

Michael Buckmaster

Case 08-29

3.


Budgeted Income StatementFor the Three Months Ended June 30

Sales in units 140,000$Sales 1,120,000$

Variable expenses:Cost of goods sold 700,000$Commissions 140,000 840,000

Contribution margin 280,000

Fixed expenses:Salaries and wages 66,000Utilities 42,000

Insurance expired 3,600Depreciation 4,500Miscellaneous 9,000 125,100

Net operating income 154,900Less interest expense (3,020)Net income 151,880$

Correct!

4.


Budgeted Balance Sheet

June 30

Assets

Cash 10,730$

Accounts receivable 450,000Inventory 180,000Unexpired insurance 10,800

Fixed assets, net of depreciation 193,200Total assets 844,730$

Correct!

Liabi l i t ies and Stockholders' Equity

Accounts payable, purchases 105,000$

Dividends payable 12,000Loans payable, bank 111,000Capital stock, no par 300,000Retained earnings 316,730Total liabilities and equity 844,730$

Correct!

Accounts receivable at June 30:May sales 90,000$June sales 360,000Total 450,000$

Correct!Retained earnings at June 30:

Balance, March 31 176,850$

Add net income 151,880Total 328,730Less dividends declared (12,000)Balance, June 30 316,730$

Correct!


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Notes

Part 1 c 90% of the next months sales in units

2. Line A-46 Add receipts from customers (Part 1b.)

2. Line A-29 Part 1d.

Conclusion Balances are the maximum amount (in increments of $1,000) that the company could repay

to the bank and still have $10,000 ending balance.

** $48,000 x 1% x 3 = $1,440

$79,000 x 1 % x 2 = $1580

Total Interest = $3020

Part 3 Sales revenue (Part 1a.)

Cost of goods sold (140,000 ties @ $5 per tie)

Commissions (140,000 ties @ $1 per tie)

Part 4 Cash (Part 2)

Accounts receivable:25% x May sales of $360,000 = 90,000

75% x June sales of $480,000 = $360,000

Total $450,000

Inventory (36,000 ties @ $5 per tie) = $180,000

Unexpired Insurance ($14,000 - 3,600) = 10,800

Fixed assets, net of depreciation ($172,000 + 25,000 - 4,500)

Total assets = $844,730

Accounts payable, purchases (50% x 210,000 Part 1c.) = 105,000

Dividends payable = 12,000

Loans payable, bank (part 2; $127,000 - $16,000) =111,000

Retained earnings (See below)

Total liabilities and equity = $844,730

Retained earnings at June 30:

Balance March 31 $176,850

Add net income (part 3) =$151, 880

Total $328,730

Less dividends declared ($12,000)

Balance June 30 $316,730


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Minimum ending cash balance 10,000$Selling price 8$

Recent and forecast sales (in units):January (actual) 20,000

February (actual) 24,000March (actual) 28,000April 35,000May 45,000June 60,000July 40,000August 36,000September 32,000

Desired ending inventories (percentage 90%of next month's sales)

Cost of earrings 5$

Purchases paid as follows:

In month of purchase 50%In following month 50%

Collection on sales:

Sales collected current month 25%Sales collected following month 50%Sales collected 2nd month following 25%

Variable monthly expenses:

Sales commissions (per tie) 1.00$

Fixed monthly expenses:

Wages and salaries 22,000$Utilities 14,000$Insurance 1,200$Depreciation 1,500$Miscellaneous 3,000$

Land purchased in May 25,000$Dividends declared each quarter 12,000$


Given Data Case 08-29:


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Given Data Case 08-29:

Balance sheet at March 31:

Cash 14,000$Accounts receivable

February sales 48,000$March sales 168,000 216,000

Inventory (31,500 units) 157,500

Prepaid insurance 14,400Fixed assets, net of depreciation 172,700Total assets 574,600$

Accounts payable 85,750$Dividends payable 12,000Capital stock 300,000Retained earnings 176,850Total liabilities and stockholders' equity 574,600$

Agreement with Bank:

Borrowing increments 1,000$Maximum borrowing amount 40,000$Interest rate per month 1%Repayment increments 1,000$Total of interest paid each quarter 100%Required minimum cash balance 10,000$

Liabi l i t ies and Stock holders' Equity

Assets

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