87. The excess (deficiency) of cash available over disbursements for November will be:
9-82
88. To attain its desired ending cash balance for November, the company needs to borrow:
Deshaies Corporation is preparing its cash budget for November. The budgeted beginning
cash balance is $10,000. Budgeted cash receipts total $100,000 and budgeted cash
disbursements total $104,000. The desired ending cash balance is $30,000.
89. The excess (deficiency) of cash available over disbursements for November is:
90. To attain its desired ending cash balance for November, the company should borrow:
9-85
Carpon Lumber sells lumber and general building supplies to building contractors in a
medium-sized town in Montana. Data regarding the store’s operations follow:
ο Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for
January.
ο Collections are expected to be 55% in the month of sale, 44% in the month following the sale,
and 1% uncollectible.
ο The cost of goods sold is 75% of sales.
ο The company desires to have an ending merchandise inventory equal to 60% of the next
month’s cost of goods sold. Payment for merchandise is made in the month following the
purchase.
ο Other monthly expenses to be paid in cash are $21,100.
ο Monthly depreciation is $19,000.
ο Ignore taxes.
91. The net income for December would be:
92. The cash balance at the end of December would be:
93. The accounts receivable balance, net of uncollectible accounts, at the end of December
would be:
94. Accounts payable at the end of December would be:
95. Retained earnings at the end of December would be:
9-91
96. Randall Company is a merchandising company that sells a single product. The company’s
inventories, production, and sales in units for the next three months have been forecasted as
follows:
Units are sold for $12 each. One fourth of all sales are paid for in the month of sale and the
balance are paid for in the following month. Accounts receivable at September 30 totaled
$450,000.
Merchandise is purchased for $7 per unit. Half of the purchases are paid for in the month of the
purchase and the remainder are paid for in the month following purchase. Selling and
administrative expenses are expected to total $120,000 each month. One half of these expenses
will be paid in the month in which they are incurred and the balance will be paid in the following
month. There is no depreciation. Accounts payable at September 30 totaled $290,000.
Cash at September 30 totaled $80,000. A payment of $300,000 for purchase of equipment is
scheduled for November, and a dividend of $200,000 is to be paid in December.
Required:
a. Prepare a schedule of expected cash collections for each of the months of October, November,
and December.
b. Prepare a schedule showing expected cash disbursements for merchandise purchases and
selling and administrative expenses for each of the months October, November, and December.
c. Prepare a cash budget for each of the months October, November, and December. There is no
minimum required ending cash balance.
9-93
97. Welnor Industrial Gas Corporation supplies acetylene and other compressed gases to
industry. Data regarding the store’s operations follow:
ο Sales are budgeted at $320,000 for November, $340,000 for December, and $330,000 for
January.
ο Collections are expected to be 75% in the month of sale, 20% in the month following the sale,
and 5% uncollectible.
ο The cost of goods sold is 65% of sales.
ο The company desires ending merchandise inventory to equal 80% of the following month’s
cost of goods sold. Payment for merchandise is made in the month following the purchase.
ο Other monthly expenses to be paid in cash are $21,000.
ο Monthly depreciation is $16,000.
ο Ignore taxes.
Required:
a. Prepare a Schedule of Expected Cash Collections for November and December.
b. Prepare a Merchandise Purchases Budget for November and December.
c. Prepare Cash Budgets for November and December.
d. Prepare Budgeted Income Statements for November and December.
e. Prepare a Budgeted Balance Sheet for the end of December.