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Solutions Manual, Chapter 8 61
Problem 8-29 (120 minutes)
1. Schedule of expected cash collections:
April May June Quarter
Cash sales ……………….. $36,000 * $43,200 $54,000 $133,200
T
2. Merchandise purchases budget:
April May June Quarter
Bud
g
eted cost of
g
oods
sold1 ……………………… $45,000 * $ 54,000 * $67,500 $166,500
A
dd desired endin
g
merchandise
inventory2 ……………….. 43,200 * 54,000 28,800
*
28,800
T
Schedule of expected cash disbursements—merchandise purchases
April May June Quarter
March purchases …………. $21,750 * $ 21,750 *
A
pril purchases …………… 26,100 * $26,100 * 52,200 *
May purchases …………… 32,400 $32,400 64,800
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62 Managerial Accounting, 16th Edition
Problem 8-29 (continued)
3. Cash budget:
April May June Quarter
Be
g
innin
g
cash balance . $ 8,000 * $ 4,350 $ 4,590 $ 8,000
A
dd collections from
T
Less cash
disbursements:
For inventory …………. 47,850 * 58,500 53,550 159,900
For expenses …………. 13,300 * 15,460 18,700 47,460
For equipment ……….. 1,500 * 0 0 1,500
T
otal cash
T
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Solutions Manual, Chapter 8 63
Problem 8-29 (continued)
4.
Shilow Company
Income Statement
For the Quarter Ended June 30
Sales ($60,000 + $72,000 + $90,000) ……. $222,000
Cost of
g
oods sold:
Sellin
g
and administrative expenses:
Commissions (12% of sales) ……………… 26,640
Rent ($2,500 × 3) …………………………… 7,500
Depreciation ($900 × 3)……………………. 2,700
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64 Managerial Accounting, 16th Edition
Problem 8-29 (continued)
5.
Shilow Company
Balance Sheet
June 30
A
ssets
Current assets:
Cash (see requirement 3)…………………………………….. $ 4,910
A
ccounts receivable ($90,000 × 40%)…………………….. 36,000
T
—
T
Liabilities and Stockholders’ Equity
A
ccounts payable (Part 2: $42,300 × 50%).. $ 21,150
Stockholders’ equity:
Common stock (Given) ……………………….. $150,000
T
A
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Solutions Manual, Chapter 8 65
Problem 8-30 (60 minutes)
1. The estimated sales for the third quarter:
Month
July August September Quarter
2. The expected cash collections from sales for the third quarter:
A
ccounts receivable,
June 30:
$300,000 × 65% …… $195,000 $ 195,000
July sales:
A
T
3. The production budget (quantity of beach umbrellas) for July-October:
July August September October
Bud
g
eted unit sales …………… 30,000 70,000 50,000 20,000
A
dd desired units of endin
g
T
g
g
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66 Managerial Accounting, 16th Edition
Problem 8-30 (continued)
4 and 5. The direct materials budget for the third quarter:
July
A
u
g
ust September Quarter
Required production in units of
finished goods ……………………… 36,000 67,000 45,500 148,500
Units of raw materials needed per
unit of finished goods ……………. × 4 × 4 × 4 × 4
Units of raw materials needed to
A
T
g
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Solutions Manual, Chapter 8 67
Problem 8-30 (continued)
6. The expected cash disbursements for materials purchases for the third quarter:
July August September Quarter
A
ccounts payable,
July purchases:
A
u
g
ust purchases:
September purchases:
T
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68 Managerial Accounting, 16th Edition
Problem 8-31 (120 minutes)
1. Schedule of expected cash collections:
January February March Quarter
Cash sales ……………….. $ 80,000 * $120,000 $ 60,000 $ 260,000
T
2. a. Merchandise purchases budget:
January February March Quarter
Bud
g
eted cost of
g
oods
sold1 ..……………………. $240,000 * $360,000 * $180,000 $780,000
A
dd desired endin
g
merchandise
inventory2 ………………. 90,000 * 45,000 30,000 30,000
T
A
b. Schedule of expected cash disbursements for merchandise purchases:
January February March Quarter
December
purchases ….……… $ 93,000 * $ 93,000 *
January purchases … 135,000 * $135,000 * 270,000 *
T