Chapter 13 – Planning and Budgeting
13–47. (continued)
d. $1,141,516 September cash disbursement.
August purchases paid in September: $900,000* x 46% = $414,000
August selling general and administrative expenses paid in September:
Chapter 13 – Planning and Budgeting
13–48. (40 min.) Comprehensive Budget Plan: Brighton, Inc.
a. (1)
Brighton, Inc.
Schedule Computing Production
Budget (Units)
For April, May, and June
May
June
Budgeted sales—Units ………………………………..
450,000
600,000
Inventory required at end of montha ………………
120,000
120,000
Total to be accounted for ……………………………..
570,000
720,000
Less inventory on hand at beginning of month ..
90,000
120,000
Budgeted production—Units …………………………
480,000
600,000
a
April: 450,000 x .2 = 90,000
May: 600,000 x .2 = 120,000
June: 600,000 x .2 = 120,000
(2)
Schedule Computing Raw Materials Inventory
Budgeted production—Pounds (1/4 lb. per Unit)a …..
142,500
Inventory required at end of monthb ……………………..
60,000
Total to be accounted for …………………………………….
190,500
Less inventory on hand at beginning of month ……….
Chapter 13 – Planning and Budgeting
13–31
13–48. (continued)
b.
Brighton, Inc.
Projected Income Statement
Sales revenue (450,000 Units at $4) …………………………………
$1,800,000
Less: Cash discounts on Sales …………………………………………
$ 18,000
Estimated bad debts (1/2 percent of gross sales) ………………
9,000
27,000
Net Sales ………………………………………………………………………
$1,773,000
Cost of Sales:
Variable cost per unit (=
$1,100,000
x 450,000 Units) …..………………………
$990,000
500,000
Fixed Cost …………………………..……………………………………...
400,000
1,390,000
Gross profit on sales …………………………..…………………………..
$ 383,000
Expenses:
Selling (10 percent of gross sales) ………………………………...
$180,000
Administrative ($165,000 per month) ……………………………...
165,000
Interest expense (.01 x $500,000) ………………………………....
5,000
350,000
Operating profit ……………………………………………………………....
$ 33,000
Chapter 13 – Planning and Budgeting
13–32
13–49. (60 min.) Comprehensive Budget Plan: Panther Corporation
Panther Corporation
Budgeted Income Statement
(in thousands)
Actual
For the Year Ended
December 31,
(Year 1)
Budgeted
For the Year Ended
December 31,
(Year 2)
Revenue:
Sales revenue …………………….…….
$1,800,000
$2,400,000
Other income ……………………..……
60,000
36,000
Total Revenue …………………………..
$1,860,000
$2,436,000
Expenses:
Cost of goods manufactured &
sold:
Materials ……………………………………………..
$ 528,000
$ 852,000
Direct labor …………………………..
540,000
872,000
Variable overhead ……………….………….
324,000
520,000
Fixed overhead
(Depreciation and other)……………………..
48,000
51,000
$1,440,000
$2,295,000
Beginning inventory ………………..…………
192,000
192,000
$1,632,000
$2,487,000
Ending inventory …………………….…….
192,000
$1,440,000
459,000a
$2,028,000
Marketing:
Salaries ……………………………..………………..
$ 54,000
$ 64,000
Commissions ……………………..……
60,000
80,000
Promotions and advertising…..………………..
126,000
240,000
180,000
324,000
Administrative:
Salaries ……………………………..………………..
$ 56,000
$ 64,000
Travel ………………………………..………………..
8,000
10,000
Office costs ………………………..…
32,000
96,000
36,000
110,000
Income taxes (credit) ……………..……………
33,600
(10,400)a
Total expenses …………………………..
$1,809,600
$2,451,600
Operating profit (loss) ………………..…………
$ 50,400
$ (15,600)
a See notes to the balance sheet.
CMA adapted
Chapter 13 – Planning and Budgeting
13–33
Note: Actual for December 31, Last Year not required but included for comparison.
13-49. (continued)
Panther Corporation
Budgeted Balance Sheet
(in thousands)
Budgeted
December 31,
Year 2
Current Assets
Cash ………………………………………………………
$ 4,800
Accounts receivable …………………………………
320,000
Inventory …………………………………………………
459,000a
Income tax receivable ……………………………….
10,400b
Total current assets ………………………………
$794,200
Plant and equipment …………………………..……….
520,000
Less: Accumulated depreciation …………………
164,000
356,000
Total assets ………………………………………….
$1,150,200
Current liabilities
Accounts payable …………………………………….
$180,000
Accrued payable ………………………………………
93,000
Notes payable ………………………………………….
200,000
Total current liabilities …………………………...
$473,000
Shareholders’ equity
Common stock …………………………………………
280,000
Retained earnings ……………………………………
397,200c
Total shareholders’ equity ………………………
677,200
Total liabilities and shareholders’ equity …..
$1,150,200
Notes on the next page:
Chapter 13 – Planning and Budgeting
13-49. (continued)
a Inventory
Chapter 13 – Planning and Budgeting
Solutions to Integrative Case
13–50. (40 min.) Prepare Cash Budget for Service Organization: Cortez Beach
Yacht Club.
The income statement is on a cash basis, hence we start with a budgeted income
statement.
a. Cortez Beach Yacht Club
Chapter 13 – Planning and Budgeting
13–36
13–50. (continued)
b. Operating problems that Cortez Beach Yacht Club could experience in Year 10
include:
The lessons and classes contribution to cash decreased because the projected