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Solutions Manual, Chapter 8 21
Exercise 8-9 (15 minutes)
Mecca Copy
Budgeted Balance Sheet
Assets
Current assets:
Cash* ……………………………………….. $12,200
A
ccounts receivable ……………………… 8,100
Supplies inventory ……………………….. 3,200
T
A
T
Liabilities and Stockholders’ Equity
Current liabilities:
A
ccounts payable …………………………. $ 1,800
Stockholders’ equity:
Common stock ……………………………. $ 5,000
g
T
T
*Plug figure.
# Retained earnin
s, be
g
innin
g
balance.. $28,000
A
dd net income …………………………… 11,500
g
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22 Managerial Accounting, 16th Edition
Exercise 8-10 (45 minutes)
1. Production budget:
July August
Septem-
ber October
Bud
g
eted unit sales ………….. 35,000 40,000 50,000 30,000
A
dd desired units of endin
g
finished goods inventory* … 11,000 13,000 9,000 7,000
2. During July and August, the company is building inventories in
anticipation of peak sales in September. Therefore, production exceeds
T
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Solutions Manual, Chapter 8 23
Exercise 8-10 (continued)
3. Direct materials budget:
July August
Septem-
ber
Third
Quarter
Required production in units of finished
g
oods ….. 36,000 42,000 46,000 124,000
Units of raw materials needed per unit of finished
goods ……………………………………………………. × 3 cc
× 3 cc × 3 cc × 3 cc
Units of raw materials needed to meet production 108,000 126,000 138,000 372,000
A
dd desired units of endin
g
raw materials
T
As shown in part (1), production is greatest in September; however, as shown in the raw material
purchases budget, purchases of materials are greatest a month earlier—in August. The reason for the
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
24 Managerial Accounting, 16th Edition
Exercise 8-11 (20 minutes)
Q
uarter (000 omitted
)
1
2
3
4
Y
ea
r
Be
g
innin
g
cash balance ………………………… $ 6 * $ 5 $ 5 $ 5 $ 6
A
dd collections from customers ………………. 65 70 96 * 92 323 *
T
otal cash available ……………………………… 71 *75 101 97 329
Less cash disbursements:
Purchase of inventory ………………………… 35 * 45 * 48 35 * 163
Sellin
g
and administrative expenses ………. 28 30 * 30 * 25 113 *
T
T
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Chapter 8 25
Exercise 8-12 (30 minutes)
1. Schedule of expected cash collections:
Month
July August Sept. Quarter
From accounts receivable $136,000 $136,000
From July sales:
35% × 210,000 ….……. 73,500 73,500
65% × 210,000 ……….. $136,500 136,500
2. a. Merchandise purchases budget:
July August Sept. Total
Bud
g
eted cost of
g
oods sold
(60% of sales) ………………… $126,000 $138,000 $132,000 $396,000
A
dd desired endin
g
merchandise inventory* …….. 41,400 39,600 43,200 43,200
T
b. Schedule of cash disbursements for purchases:
July August Sept. Total
From accounts payable………. $ 71,100 $ 71,100
For July purchases ……………. 42,160 $ 63,240 105,400
A
A
T
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26 Managerial Accounting, 16th Edition
Exercise 8-12 (continued)
3.
Beech Corporation
Income Statement
For the Quarter Ended September 30
Sales ($210,000 + $230,000 + $220,000).. $660,000
Cost of
g
oods sold (Part 2a) ………………… 396,000
4.
Beech Corporation
Balance Sheet
September 30
A
sset
s
Cash ($90,000 + $653,000
–
$366,940
–
($55,000 ×
3)) ………………………………………..…………………. $211,060
A
ccounts receivable ($220,000 × 65%) ………………… 143,000
–
T
Liabilities and Stockholder
s
’ Equit
y
A
ccounts payable ($135,600 × 60%)……………………. $ 81,360
Common stock (Given) ……………………………………… 327,000
T
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Chapter 8 27
Exercise 8-13 (30 minutes)
1. Schedule of expected cash collections:
Month
July August September Quarter
From accounts receivable $136,000 $136,000
From July sales:
45% × 210,000 ….……. 94,500 94,500
T
2. a. Merchandise purchases budget:
July August Sept. Total
Bud
g
eted cost of
g
oods sold…. $126,000 $138,000 $132,000 $396,000
A
dd desired endin
g
T
b. Schedule of cash disbursements for purchases:
July August Sept. Total
From accounts payable………. $ 71,100 $ 71,100
For July purchases ……………. 27,480 $ 64,120 91,600
A
T
A
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28 Managerial Accounting, 16th Edition
Exercise 8-13 (continued)
3.
Beech Corporation
Income Statement
For the Quarter Ended September 30
Sales ($210,000 + $230,000 + $220,000).. $660,000
Cost of
g
oods sold (Part 2a) ………………… 396,000
Gross mar
g
in ……………………………………. 264,000
4.
Beech Corporation
Balance Sheet
September 30
A
sset
s
Cash ($90,000 + $675,000
–
$339,820
–
($55,000 ×
3)) ………………………………………..…………………. $260,180
A
ccounts receivable ($220,000 × 55%) ………………… 121,000
–
T
Liabilities and Stockholder
s
’ Equit
y
A
ccounts payable ($134,400 × 70%)……………………. $ 94,080
T
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Solutions Manual, Chapter 8 29
Exercise 8-14 (30 minutes)
1. Jessi Corporation
Sales Budget
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter Year
Bud
g
eted unit sales ……………. 11,000 12,000 14,000 13,000 50,000
2.
Schedule of Expected Cash Collections
Be
g
innin
g
accounts receivable . $ 70,200 $ 70,200
1st Quarter sales (65%, 30%) .. 128,700 $ 59,400 188,100
2nd Quarter sales (65%, 30%) . 140,400 $ 64,800 205,200
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30 Managerial Accounting, 16th Edition
Exercise 8-14 (continued)
3. Jessi Corporation
Production Budget
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter Year
Bud
g
eted unit sales ……………. 11,000 12,000 14,000 13,000 50,000
A
dd desired units of endin
g
finished goods inventory* ….. 1,800 2,100 1,950 1,850 1,850
T