ACCT 212 Study Guide - Quiz Guide: Net Income, Common Stock, Finished Good
Get access
Related Documents
Related Questions
Big Sound, a merchandising company specializing in home computerspeakers, budgets its monthly cost of goods sold to equal 50% ofsales. Its inventory policy calls for ending inventory in eachmonth to equal 40% of the next monthâs budgeted cost of goods sold.All purchases are on credit, and 30% of the purchases in a month ispaid for in the same month. Another 30% is paid for during thefirst month after purchase, and the remaining 40% is paid for inthe second month after purchase. The following sales budgets areset: July, $300,000; August, $240,000; September, $270,000;October, $225,000; and November, $215,000. 1. Compute budgeted merchandise purchases for July, August,September, and October 2. Compute the budgeted payments on accounts payable forSeptember and October 3. Compute the budgeted ending balances of accounts payable forSepttember and October show all work |
solve for blanks in part 1 and 0 in part 2
Problem 14-20 Cash budget-part 2 LO 4, 8
PrimeTime Sportswear is a custom imprinter that began operationssix months ago. Sales have exceeded management's most optimisticprojections. Sales are made on account and collected as follows:49% in the month after the sale is made and 44% in the second monthafter sale. Merchandise purchases and operating expenses are paidas follows:
In the month duringwhich the merchandise is purchased or the cost is incurred | 75 | % |
In the subsequent month | 25 | % |
PrimeTime Sportswear's income statement budget for each of the nextfour months, newly revised to reflect the success of the firm,follows:
September | October | November | December | ||||||||||||
Sales | $ | 42,300 | $ | 54,200 | $ | 68,200 | $ | 58,800 | |||||||
Cost of goods sold: | |||||||||||||||
Beginning inventory | $ | 6,380 | $ | 14,910 | $ | 20,360 | $ | 21,910 | |||||||
Purchases | 37,700 | 44,300 | 49,300 | 32,800 | |||||||||||
Cost of goods available forsale | $ | 44,080 | $ | 59,210 | $ | 69,660 | $ | 54,710 | |||||||
Less: Ending inventory | (14,910 | ) | (20,360 | ) | (21,910 | ) | (19,790 | ) | |||||||
Cost of goods sold | $ | 29,170 | $ | 38,850 | $ | 47,750 | $ | 34,920 | |||||||
Gross profit | $ | 13,130 | $ | 15,350 | $ | 20,450 | $ | 23,880 | |||||||
Operating expenses | 10,800 | 12,300 | 14,800 | 16,400 | |||||||||||
Operating income | $ | 2,330 | $ | 3,050 | $ | 5,650 | $ | 7,480 | |||||||
Cash on hand August 31 is estimated to be $39,580. Collectionsof August 31 accounts receivable were estimated to be $19,800 inSeptember and $14,810 in October. Payments of August 31 accountspayable and accrued expenses in September were estimated to be$23,790.
Required:
a-1. Prepare a cash budget for October andNovember. (Beginning cash should be indicated with a minussign if it is a negative amount.)
|
a-2. What are the prospects for this company ifits sales growth continues at a similar rate?
Prospects are not good | |
Prospects are good |
b-1. Assume now that PrimeTime Sportswear is amature firm, and that the SeptemberâNovember data represent aseasonal peak in business. Prepare a cash budget for December,January, and February, assuming that the income statements forJanuary and February are the same as December's.(Beginningcash should be indicated with a minus sign if it is a negativeamount.)
solve for blan
|