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Title: Problem 22-3A
QA_Ori:
Part 1
Cash collections of credit sales (accounts receivable)
From sales in Total % Collected June July
April $ 720,000 28% $201,600
Part 2
Budgeted ending inventories (in units)
April May June July
Next month’s budgeted sales 2,000 6,000 5,000 3,800
Part 3
AZTEC COMPANY
Merchandise Purchases Budgets
For May, June, and July
May June July
Budgeted ending inventory (from part 2) 1,300 1,100 860
Add budgeted sales 2,000 6,000 5,000
Part 4
Cash payments on product purchases (for June and July)
From purchases in Total % Paid June July
May $308,000 40% $123,200
Part 5
AZTEC COMPANY
Cash Budget
June and July
June July
Beginning cash balance $100,000 $100,000
Cash receipts from customers 597,600 820,800
** Loan balance
$0
* Interest expense
** Loan balance
Part 6
Information about the need for cash in the near future would be helpful to the
In addition, a good cash budget is likely to be helpful to management in negotiating the
Title: Problem 22-4A
QA_Ori:
Part 1
MERLINE
Budgeted Income Statement
For Months of January, February, and March, 2014
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
* Volume for the next three months increases by 10% per month
Sales Cost of Goods
Units (@ $125) Sold (@ $75)
December ($2,250,000/$150) 15,000
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
Title: Problem 22-5A
QA_Ori:
Part 1
DIMSDALE SPORTS CO.
Sales Budgets
January, February, and March 2014
Budgeted Budgeted Budgeted
Units Unit Price Total Dollars
January 2014 7,000 $55 $ 385,000
Part 2
DIMSDALE SPORTS CO.
Merchandise Purchases Budgets
January, February, and March 2014
January February March Total
Next month’s budgeted sales 9,000 11,000 10,000
Ratio of inventory to future sales x 20% x 20% x 20%
0
Part 3
DIMSDALE SPORTS CO.
Selling Expense Budgets
January, February, and March 2014
January February March Total
Budgeted sales $385,000 $495,000 $605,000
Part 4
DIMSDALE SPORTS CO.
General and Administrative Expense Budgets
January, February, and March 2014
January February March Total
Salaries $12,000 $12,000 $12,000 $36,000
*Depreciation expense calculations
Annual
Amount January February March Total
Equipment owned
on 12/31/2013 $67,50
0
$5,625 $5,625 $5,625 $16,875
Part 5
DIMSDALE SPORTS CO.
Capital Expenditures Budgets
January, February, and March 2014
January February March
Part 6
DIMSDALE SPORTS CO.
Cash Budgets
January, February, and March 2014
January February March
Beginning cash balance $
36,000
$ 30,100 $210,300
Cash receipts from customers (note A) 221,250 697,000 489,500
Total cash available 257,250 727,100 699,800
Maintenance expense 2,000 2,000 2,000
Interest ($15,000 x 1%) 150
Supporting calculations January Februar
y
March Total
Note A: Cash receipts from customers
Total sales $385,00
0
$495,00
0
$605,00
0
$1,485,0
00
Cash sales (25%)
96,250
123,750
151,250
371,250
Credit sales (75%)
288,750
371,250
453,750
1,113,75
0
80,000
0
0
Part 7
DIMSDALE SPORTS CO.
Budgeted Income Statement
For Three Months Ended March 31, 2014
Sales $1,485,000
Cost of goods sold (27,000 units @ $30) 810,000
Sales salaries 15,000
General administrative salaries 36,000
Part 8
DIMSDALE SPORTS CO.
Budgeted Balance Sheet
March 31, 2014
ASSETS
Cash $ 143,400 Cash budget
Accounts receivable 602,250 Note C
Supporting Footnotes
Note C
Beginning receivables $ 525,000
Less cost of goods sold
(810,000)
Ending inventory* $ 60,000
Payments
(530,400)
Ending accounts payable $ 549,600
Note H
Beginning retained earnings $ 246,000
Net income 180,330
Total $ 426,330
Title: Problem 22-6A
QA_Ori:
Part 1
BLACK DIAMOND COMPANY
Production Budget (in units)
Third Quarter
Budgeted ending inventory (skis) 3,500
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
Materials cost per pound....................................................................... $15
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
