bacus Company sells its productfor $220 per unit. Its actual and projected sales follow.
Units Dollars April (actual) 9,500 $2,090,000 May (actual) 2,400 528,000 June (budgeted) 6,000 1,320,000 July (budgeted) 5,500 1,210,000 August(budgeted) 4,000 880,000
All sales are on credit. Recent experience shows that 24% ofcredit sales is collected in the month of the sale, 46% in themonth after the sale, 24% in the second month after the sale, and6% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 20% of the next monthâs unit sales plusa safety stock of 75 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,536,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $82,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$82,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 13%interest rate. On May 31, the loan balance is $48,500, and thecompanyâs cash balance is $82,000.
References
Section BreakLearning Objective: 23-C2 Describea master budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
2.
value:
1.78 points
Required information
Required: 1. Prepare a table that shows the computation of cash collectionsof its credit sales (accounts receivable) in each of the months ofJune and July. (Omit the "$" & "%" signs in yourresponse.)
Cash collections of credit sales(accounts receivable)
From sales in Total %Collected June July April $ % $ May $ June July Total collected $ $
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
3.
value:
1.78 points
Required information
2. Prepare a table that shows the computation of budgeted endinginventories (in units) for April, May, June, and July.(Omit the "%" sign in your response.)
Budgeted ending inventories (inunits)
April May June July Next monthâsbudgeted sales Ratio of inventoryto future sales % % % % Budgeted âbaseâending inventory Plus safetystock Budgeted endinginventory
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
4.
value:
1.78 points
Required information
3. Prepare the merchandise purchases budget for May, June, andJuly. Report calculations in units and then show the dollar amountof purchases for each month. (Amounts to be deducted shouldbe indicated with a minus sign. Omit the "$" sign in yourresponse.)
ABACUS COMPANY
Merchandise Purchases Budgets
For May, June, and July May June July (Click toselect)Payments on purchasesBudgeted ending inventoryBeginninginventoryBudgeted beginning inventoryBudgeted purchases (Click toselect)Payments on purchasesAdd: Budgeted salesBudgetedpurchasesDeduct: Budgeted salesBudgeted beginning inventory Required units ofavailable merchandise (Click toselect)Budgeted purchases (units)Deduct: Beginning inventoryAdd:Beginning inventoryBudgeted ending inventoryBudgeted sales (Click toselect)Beginning inventoryBudgeted salesBudgeted beginninginventoryBudgeted purchasesBudgeted ending inventory (Click toselect)Payments on purchasesBudgeted ending inventoryBeginninginventoryBudgeted salesBudgeted cost per unit $ $ $ Budgeted cost ofmerchandise purchases $ $ $
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
5.
value:
1.78 points
Required information
4. Prepare a table showing the computation of cash payments onproduct purchases for June and July.(Round your answers tothe nearest dollar amount. Omit the "$" & "%" signs in yourresponse.)
Cash payments on productpurchases (for June and July)
From purchasesin Total % Paid June July May $ % $ June $ July Total Paid $ $
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
6.
value:
1.78 points
Required information
5. Prepare a cash budget for June and July, including any loanactivity and interest expense. Compute the loan balance at the endof each month. (Leave no cells blank - be certain to enter"0" wherever required. Input all amounts as positive values exceptpreliminary cash balance and any repayments to bank which should beindicated by a minus sign. Round intermediate calculations andfinal answers to the nearest dollar amount. Omit the "$" sign inyour response.)
ABACUS COMPANY
Cash Budget
June and July June July (Click toselect)Additional loan from bankSelling and administrativeexpensesPayments on purchasesBeginning cash balanceInterestexpense $ $ (Click toselect)Selling and administrative expensesCash receipts fromcustomersPayments on purchasesInterest expenseAdditional loan frombank Total availablecash Cashdisbursements (Click to select)Payments onpurchasesPreliminary cash balanceCash receipts fromcustomersAdditional loan from bankRepayment of loan to bank (Click to select)Additional loan frombankRepayment of loan to bankCash receipts fromcustomersPreliminary cash balanceSelling and administrativeexpenses (Click to select)Cash receipts fromcustomersInterest expensePreliminary cash balanceAdditional loanfrom bankRepayment of loan to bank Total disbursements (Click toselect)Payments on purchasesInterest expenseCash receipts fromcustomersPreliminary cash balanceSelling and administrativeexpenses (Click toselect)Payments on purchasesSelling and administrativeexpensesInterest expenseCash receipts from customersAdditional loanfrom bank (Click toselect)Cash receipts from customersSelling and administrativeexpensesPayments on purchasesInterest expenseRepayment of loan tobank (Click toselect)Ending cash balancePayments on purchasesPreliminary cashbalanceEnding loan balanceAdditional loan from bank $ $ (Click toselect)Ending cash balanceEnding loan balancePayments onpurchasesAdditional loan from bankPreliminary cash balance $ $
| bacus Company sells its productfor $220 per unit. Its actual and projected sales follow. |
| Units | Dollars | |
| April (actual) | 9,500 | $2,090,000 |
| May (actual) | 2,400 | 528,000 |
| June (budgeted) | 6,000 | 1,320,000 |
| July (budgeted) | 5,500 | 1,210,000 |
| August(budgeted) | 4,000 | 880,000 |
All sales are on credit. Recent experience shows that 24% ofcredit sales is collected in the month of the sale, 46% in themonth after the sale, 24% in the second month after the sale, and6% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 20% of the next monthâs unit sales plusa safety stock of 75 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,536,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $82,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$82,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 13%interest rate. On May 31, the loan balance is $48,500, and thecompanyâs cash balance is $82,000. |
References
Section BreakLearning Objective: 23-C2 Describea master budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
2.
value:
1.78 points
Required information
| Required: | |
| 1. | Prepare a table that shows the computation of cash collectionsof its credit sales (accounts receivable) in each of the months ofJune and July. (Omit the "$" & "%" signs in yourresponse.) |
| Cash collections of credit sales(accounts receivable) |
| From sales in | Total | %Collected | June | July |
| April | $ | % | $ | |
| May | ||||
| $ | ||||
| June | ||||
| July | ||||
| Total collected | $ | $ | ||
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
3.
value:
1.78 points
Required information
| 2. | Prepare a table that shows the computation of budgeted endinginventories (in units) for April, May, June, and July.(Omit the "%" sign in your response.) |
| Budgeted ending inventories (inunits) |
| April | May | June | July | |
| Next monthâsbudgeted sales | ||||
| Ratio of inventoryto future sales | % | % | % | % |
| Budgeted âbaseâending inventory | ||||
| Plus safetystock | ||||
| Budgeted endinginventory | ||||
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
4.
value:
1.78 points
Required information
| 3. | Prepare the merchandise purchases budget for May, June, andJuly. Report calculations in units and then show the dollar amountof purchases for each month. (Amounts to be deducted shouldbe indicated with a minus sign. Omit the "$" sign in yourresponse.) |
| ABACUS COMPANY Merchandise Purchases Budgets For May, June, and July | |||
| May | June | July | |
| (Click toselect)Payments on purchasesBudgeted ending inventoryBeginninginventoryBudgeted beginning inventoryBudgeted purchases | |||
| (Click toselect)Payments on purchasesAdd: Budgeted salesBudgetedpurchasesDeduct: Budgeted salesBudgeted beginning inventory | |||
| Required units ofavailable merchandise | |||
| (Click toselect)Budgeted purchases (units)Deduct: Beginning inventoryAdd:Beginning inventoryBudgeted ending inventoryBudgeted sales | |||
| (Click toselect)Beginning inventoryBudgeted salesBudgeted beginninginventoryBudgeted purchasesBudgeted ending inventory | |||
| (Click toselect)Payments on purchasesBudgeted ending inventoryBeginninginventoryBudgeted salesBudgeted cost per unit | $ | $ | $ |
| Budgeted cost ofmerchandise purchases | $ | $ | $ |
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
5.
value:
1.78 points
Required information
| 4. | Prepare a table showing the computation of cash payments onproduct purchases for June and July.(Round your answers tothe nearest dollar amount. Omit the "$" & "%" signs in yourresponse.) |
| Cash payments on productpurchases (for June and July) |
| From purchasesin | Total | % Paid | June | July |
| May | $ | % | $ | |
| June | ||||
| $ | ||||
| July | ||||
| Total Paid | $ | $ | ||
References
eBook & Resources
WorksheetLearning Objective: 23-C2 Describe amaster budget and the process of preparing it.
Difficulty: HardLearning Objective: 23-P2 Linkboth operating and capital expenditures budgets to budgetedfinancial statements.
Check my work
6.
value:
1.78 points
Required information
| 5. | Prepare a cash budget for June and July, including any loanactivity and interest expense. Compute the loan balance at the endof each month. (Leave no cells blank - be certain to enter"0" wherever required. Input all amounts as positive values exceptpreliminary cash balance and any repayments to bank which should beindicated by a minus sign. Round intermediate calculations andfinal answers to the nearest dollar amount. Omit the "$" sign inyour response.) |
| ABACUS COMPANY Cash Budget June and July | ||
| June | July | |
| (Click toselect)Additional loan from bankSelling and administrativeexpensesPayments on purchasesBeginning cash balanceInterestexpense | $ | $ |
| (Click toselect)Selling and administrative expensesCash receipts fromcustomersPayments on purchasesInterest expenseAdditional loan frombank | ||
| Total availablecash | ||
| Cashdisbursements | ||
| (Click to select)Payments onpurchasesPreliminary cash balanceCash receipts fromcustomersAdditional loan from bankRepayment of loan to bank | ||
| (Click to select)Additional loan frombankRepayment of loan to bankCash receipts fromcustomersPreliminary cash balanceSelling and administrativeexpenses | ||
| (Click to select)Cash receipts fromcustomersInterest expensePreliminary cash balanceAdditional loanfrom bankRepayment of loan to bank | ||
| Total disbursements | ||
| (Click toselect)Payments on purchasesInterest expenseCash receipts fromcustomersPreliminary cash balanceSelling and administrativeexpenses | ||
| (Click toselect)Payments on purchasesSelling and administrativeexpensesInterest expenseCash receipts from customersAdditional loanfrom bank | ||
| (Click toselect)Cash receipts from customersSelling and administrativeexpensesPayments on purchasesInterest expenseRepayment of loan tobank | ||
| (Click toselect)Ending cash balancePayments on purchasesPreliminary cashbalanceEnding loan balanceAdditional loan from bank | $ | $ |
| (Click toselect)Ending cash balanceEnding loan balancePayments onpurchasesAdditional loan from bankPreliminary cash balance | $ | $ |
Related questions
| Aztec Company sells its productfor $180 per unit. Its actual and projected sales follow. |
| Units | Dollars | |
| April (actual) | 6,000 | $1,080,000 |
| May (actual) | 3,200 | 576,000 |
| June (budgeted) | 8,000 | 1,440,000 |
| July (budgeted) | 7,000 | 1,260,000 |
| August(budgeted) | 4,100 | 738,000 |
| All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 27% in the second month after the sale, and3% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 22% of the next monthâs unit sales plusa safety stock of 115 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,212,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $33,000, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
|
| Aztec Company sells its productfor $180 per unit. Its actual and projected sales follow. |
| Units | Dollars | |
| April (actual) | 6,000 | $1,080,000 |
| May (actual) | 3,200 | 576,000 |
| June (budgeted) | 8,000 | 1,440,000 |
| July (budgeted) | 7,000 | 1,260,000 |
| August(budgeted) | 4,100 | 738,000 |
| All sales are on credit. Recent experience shows that 28% ofcredit sales is collected in the month of the sale, 42% in themonth after the sale, 27% in the second month after the sale, and3% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 12 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 22% of the next monthâs unit sales plusa safety stock of 115 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,212,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $33,000, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
|
Aztec Company sells its product for $160 per unit. Its actualand projected sales follow. |
| Units | Dollars |
April (actual) | 8,000 | $1,280,000 |
May (actual) | 1,800 | 288,000 |
June (budgeted) | 6,000 | 960,000 |
July (budgeted) | 6,000 | 960,000 |
August (budgeted) | 4,300 | 688,000 |
| All sales are on credit. Recent experience shows that 24% ofcredit sales is collected in the month of the sale, 46% in themonth after the sale, 28% in the second month after the sale, and2% proves to be uncollectible. The productâs purchase price is $110per unit. All purchases are payable within 13 days. Thus, 60% ofpurchases made in a month is paid in that month and the other 40%is paid in the next month. The company has a policy to maintain anending monthly inventory of 19% of the next monthâs unit sales plusa safety stock of 60 units. The April 30 and May 31 actualinventory levels are consistent with this policy. Selling andadministrative expenses for the year are $1,824,000 and are paidevenly throughout the year in cash. The companyâs minimum cashbalance at month-end is $120,000. This minimum is maintained, ifnecessary, by borrowing cash from the bank. If the balance exceeds$120,000, the company repays as much of the loan as it can withoutgoing below the minimum. This type of loan carries an annual 12%interest rate. On May 31, the loan balance is $41,500, and thecompanyâs cash balance is $120,000. (Round final answers tothe nearest whole dollar.)
|
