Exercise 20-30 (continued)
CASTOR, INC.
Cash Receipts Budget
For April, May, and June
April May June
Sales……………..…………………….…..….….….… $32,000 $40,000 $24,000
Less ending accts. receivable (50%).......... 16,000 20,000 12,000
Cash receipts from
Exercise 20-31 (30 minutes)
(1)
KELSEY
Cash Receipts Budget
For July, August, and September
July August Sept.
Sales……………..…………………….…..….….….… $64,000 $80,000 $48,000
Less ending accts. receivable (80%).......... 51,200 64,000 38,400
Cash receipts from
Exercise 20-31 (continued)
(2)
KELSEY
Cash Budget
For July, August, and September
July August Sept.
Beginning cash balance*…………….….….….. $15,000 $15,000 $25,504
Cash receipts (from part 1)………………..…... 57,800 67,200 73,600
Total cash available ……………………..…..…... 72,800 82,200 99,104
Cash disbursements
Interest on bank loan**
July (5,000 x 1%)……………………………….…
August ($4,550 x 1%)…………….……………..
Preliminary cash balance …..….….….…....…
50
_______
$15,450
46
$30,054
_______
$49,404
Additional loan from bank….….….….….….…
Financial and Managerial Accounting, 6th Edition
1158
Exercise 20-32 (15 minutes)
ZETROV COMPANY
Budgeted Balance Sheet
As of March 31
ASSETS
Cash…………………………………………….….….….….….….…. $ 50,000
Accounts receivable ($140,000 x 70%)………………….….… 98,000
Merchandise inventory (600 units x $35) …………………… 21,000
Total current assets……………………………..….….….….…. 169,000
Stockholders’ equity
Common stock…………..…………………………………..…... 25,000
Retained earnings (note 2) ………………..………………….. 56,000 81,000
Total liabilities and equity………………….…..….….….…... $206,000
Supporting calculations
(1) Accumulated depreciation
Beginning……………………………………………………..…….$46,000
Depreciation expense…………………………………………. 1,000
Ending…………………………………………………..….………..$47,000
Exercise 20-33 (15 minutes)
FORTUNE, INC.
Budgeted Income Statement
For Quarter Ended March 31
Sales (note 1)…………………..………………………….….….….… $3,750,000
Cost of goods sold (note 2)…………………………………….… 2,100,000
Gross profit……………………………………………….……….….. 1,650,000
Operating expenses
Total operating expenses…………….……………..….….….
1,258,875
Income before income taxes………………..……….….….…. 391,125
Income tax expense (note 3)…………….……..….….….….…. 117,338
Net income……………..………………………………….….….…... $ 273,787
Supporting calculations
(3) Income tax expense
Pre-tax income…….……..…….……..…….……….… $ 391,125
Tax rate……….…….……..…….……………..…….…… 30%
Income tax expense…………..……………….…….. $ 117,338*
* Rounded to the nearest dollar.
Financial and Managerial Accounting, 6th Edition
Exercise 20-34 (15 minutes)
RENDER CO. CPA
Activity-Based Budget
For Year Ending December 31, 2015
Budgeted
Hours
Budgeted
Price/hour
Budgeted
Cost
Data-entry……………………………………..….…... 2,200 $10 $ 22,000
Auditing…………..……………………..……….….… 4,800 40 192,000
PROBLEM SET A
Problem 20-1A (40 minutes)
Part 1
BLACK DIAMOND COMPANY
Production Budget (in units)
Third Quarter
Budgeted ending inventory (skis)……………….………………….….….…..… 3,500
Add budgeted sales………………….……………..……………………….….….….. 150,000
Part 2
BLACK DIAMOND COMPANY
Direct Materials Budget (in lbs, except where noted)
Third Quarter
Materials (carbon fiber) needed for production (148,500 x 2).….…. 297,000
Add budgeted ending inventory (carbon fiber)…………………..….….. 4,000
Total materials (carbon fiber) requirements……………….….….….…... 301,000
Financial and Managerial Accounting, 6th Edition
Problem 20-1A (concluded)
Part 3
BLACK DIAMOND COMPANY
Direct Labor Budget
Third Quarter
Units to be produced…………..……………..…………….….….….…. 148,500
Labor requirements per unit (hours)…………….…………………. x 0.50
Part 4
BLACK DIAMOND COMPANY
Factory Overhead Budget
Third Quarter
Total labor hours needed………………….……….….….….….….…. 74,250
Variable overhead rate per DL hour……………….….….….….…. x $8
Problem 20-2A (30 minutes)
(1)
BUILT-TIGHT
Cash Receipts Budget
For July, August, and September
July August Sept.
Sales……………..…………………….…..….….….… $64,000 $80,000 $48,000
Less ending accts. receivable (80%).......... 51,200 64,000 38,400
Cash receipts from
Financial and Managerial Accounting, 6th Edition
Problem 20-2A (continued)
(2)
BUILT-TIGHT
Cash Budget
For July, August, and September
July August Sept.
Beginning cash balance*…………….….….….. $15,000 $15,000 $25,504
Cash receipts (from part 1)………………..…... 57,800 67,200 73,600
Total cash available ……………………..…..…... 72,800 82,200 99,104
Cash disbursements
Interest on bank loan**
July (5,000 x 1%)……………………………….…
August ($4,550 x 1%)…………….……………..
Preliminary cash balance …..….….….…....…
50
_______
$15,450
46
$30,054
_______
$49,404
Additional loan from bank….….….….….….…
Problem 20-3A (50 minutes)
Part 1
MERLINE MANUFACTURING
Budgeted Income Statement
For Months of January, February, and March, 2016
January February March
Sales*………………………………………..….…..$2,062,500 $2,268,750 $2,495,625
Cost of goods sold*……………..………….... 1,237,500 1,361,250 1,497,375
Gross profit………………………..….….…..…. 825,000 907,500 998,250
Expenses
Other expenses……..….….….….….….….. 10,000 10,000 10,000
Total expenses……………….……….….…..… 628,750 649,375 672,063
Net income……………..…..….….….….…..….$ 196,250 $ 258,125 $ 326,187
* Volume for the next three months increases by 10% per month
Sales Cost of Goods
Units (@ $125) Sold (@ $75)
Part 2: Analysis Component
The plan for increasing sales volume by reducing the price and increasing
advertising would cause the company to generate less net income in each of the
three months of the next quarter than was earned in December. This result is not
Financial and Managerial Accounting, 6th Edition