Exercise 22-29 (10 minutes)
HECTOR COMPANY
Budgeted Cash Disbursements
For August and September
August Sept.
Payments for merchandise*…………………………………………..$14,400 $19,200
Selling expenses (10% of sales)……………………………………..7,200 6,600
**Equals prior month’s purchases. Note that depreciation expense is excluded since it is
a non-cash expense.
Exercise 22-30 (25 minutes)
CASTOR, INC.
Cash Budget
For April, May, and June
April May June
Beginning cash balance*………………………. $12,000 $12,000 $12,279
Cash receipts**…………………………………….. 28,000 36,000 32,000
Total cash available ……………………………… 40,000 48,000 44,279
Cash disbursements
Interest on bank loan
April ($2,000 x 1%)………………………………
May ($6,060 x 1%)……………………………….
Preliminary cash balance ………………………
20
______
$7,940
61
$18,339
_______
$16,199
Additional loan from bank…………………….. 4,060
Repayment of loan to bank…………………….
_______ 6,060 _______
*April’s beginning cash balance includes an outstanding loan payable of $2,000.
**Per cash receipts budget on next page
Exercise 22-30 (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 22-31 (30 minutes)
(1)
KELSEY
Cash Receipts Budget
For July, August, and September
July August Sept.
Sales……………………………………………………. $64,000 $80,000 $48,000
Exercise 22-31 (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
Payments for merchandise……………………. 40,400 33,600 34,400
Repayment of loan to bank……………………. 450 4,550 ______
Ending cash balance…………………………….. $15,000 $25,504 $49,404
Supporting calculations
(1) Accumulated depreciation
Beginning…………………………………………………………… $46,000
Depreciation expense…………………………………………. 1,000
Ending……………………………………………………………….. $47,000
Exercise 22-33 (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
Supporting calculations
(1) Sales
Unit sales (45,000 + 55,000 + 50,000)…………. 150,000
Unit price………………………………………………… $25
Sales dollars……………………………………………. $3,750,000
(2) Cost of goods sold
* Rounded to the nearest dollar.
Exercise 22-34 (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
PROBLEM SET A
Problem 22-1A (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
Problem 22-1A (concluded)
Part 3
BLACK DIAMOND COMPANY
Direct Labor Budget
Third Quarter
Units to be produced……………………………………………………. 148,500
Part 4
BLACK DIAMOND COMPANY
Factory Overhead Budget
Third Quarter
Total labor hours needed………………………………………………. 74,250
Problem 22-2A (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