Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1243
Problem 20-4A (continued)
Part 6
ZIGBY MANUFACTURING
Selling Expense Budgets
April
May
June
Total
Budgeted sales ………………………..
$492,000
$468,000
$480,000
Part 7
ZIGBY MANUFACTURING
General and Administrative Expense Budgets
April
May
June
Total
Administrative salaries ……………….
$12,000
$12,000
$12,000
$36,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1244
Problem 20-4A (Continued)
Part 8
ZIGBY MANUFACTURING
Schedule of Cash Receipts from Sales
April
May
June
Sales ……………………………………………………….
$492,000
$468,000
$480,000
Cash receipts from
Part 9
ZIBGY MANUFACTURING
Schedule of Cash Payments for Direct Materials
April
May
June
Materials purchases ………………………………
$198,000
$201,500
$182,000
Cash payments for
$ 0
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1245
Problem 20-4A (Continued)
Part 10
ZIGBY MANUFACTURING
Cash Budget
April
May
June
Beginning cash balance ………………………….
$ 40,000
$ 85,675
$129,420
Add: Cash receipts from sales (part 8) ……….
492,000
484,800
471,600
Total cash available ………………………………..
532,000
570,475
601,020
Less: Cash payments for
Direct materials (part 9) …………………………...
201,000
198,000
201,500
Dividends ……………………………………………..
Preliminary cash balance ………………………..
$ 97,675
$129,420
$ 61,080
Loan activity
Additional loan ……………………………………….
0
0
0
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1246
Problem 20-4A (Continued)
Part 11
ZIGBY MANUFACTURING
Budgeted Income Statement
For Three Months Ended June 30
Sales …………………………………………………………………..
$1,440,000
Cost of goods sold (60,000 units x $19.85) ……………
1,191,000
Gross profit …………………………………………………………
249,000
Selling, general and administrative expenses
Income before income taxes ………………………………..
Income taxes ($75,180 x 35%) ………………………………
Part 12
ZIGBY MANUFACTURING
Budgeted Balance Sheet
June 30
ASSETS
Cash ………………………………………………
$ 61,080
Cash budget
Accounts receivable ………………………
336,000
Note A
Equipment ……………………………………..
Note D
Note E
Accounts payable …………………………..
Note F
Taxes payable ………………………………..
26,313
Income stmt.
Equity
Common stock …………………………..….
Unchanged
Retained earnings ………………………….
Note G
Raw materials inventory …………………
80,000
Note B
1247
Problem 20-4A (Concluded)
Supporting Footnotes
Note A
Beginning accounts receivable ………………………………
$ 344,400
Credit sales …………………………………………………………..
1,008,000
Less collections (from part 8: $344,400+$344,400+$327,600) ….
(1,016,400)
Ending accounts receivable …………………………………..
$ 336,000
Note B
Beginning raw materials inventory …………………………
$ 98,500
Purchases of raw materials ……………………………………
Ending raw materials inventory* …………………………….
$ 80,000
Note C
Beginning finished goods inventory ……………………….
$ 325,540
Cost of goods completed during the period* …………..
1,191,000
Less cost of goods sold during the period ………………
Ending finished goods inventory** …………………………
Note D
Beginning equipment …………………………………………….
$ 600,000
Purchased at June 30 …………………………………………….
100,000
Ending equipment …………………………………………………
$ 700,000
Note E
Beginning accumulated depreciation ……………………..
$ 150,000
Depreciation expense…………………………………………….
60,000
Ending accumulated depreciation …………………………..
$ 210,000
Note F
Beginning accounts payable ………………………………….
$ 201,000
Purchases of raw materials ……………………………………
Payments for raw materials (from part 9) ………………….
Ending accounts payable ………………………………………
$ 182,000
Note G
ZIGBY MANUFACTURING
Budgeted Statement of Retained Earnings
For Three Months Ended June 30
Retained earnings, beginning ……………… $210,440
1248
Problem 20-5AA (50 minutes)
KEGGLER’S SUPPLY
Merchandise Purchases Budgets
March
April
May
FOOTWEAR
Budgeted sales units …………………………………..
15,000
25,000
32,000
Add: Desired ending inventory
Next period budgeted sales units ……………..
25,000
32,000
35,000
Ratio of ending inventory to future sales …..
7,500
10,500
20,000
2,500
27,100
32,900
SPORTS GEAR
Budgeted sales units …………………………………..
70,000
90,000
95,000
Add: Desired ending inventory
Next period budgeted sales units ……………..
90,000
95,000
90,000
Ratio of ending inventory to future sales …..
27,000
28,500
27,000
Total required units ……………………………………..
97,000
122,000
80,000
17,000
93,500
APPAREL
Budgeted sales units …………………………………..
40,000
38,000
37,000
Add: Desired ending inventory
Next period budgeted sales units ……………..
38,000
37,000
25,000
Ratio of ending inventory to future sales …..
30%
30%
30%
11,400
11,100
Total required units ……………………………………..
50,000
11,400
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1249
Problem 20-6AA (50 minutes)
Part 1
ONEIDA COMPANY
Schedule of Cash Receipts from Sales
September
October
November
Sales ……………………………………………………
$250,000
$375,000
$400,000
Cash receipts from
Part 2
ONEIDA COMPANY
Schedule of Cash Payments for Direct Materials
September
October
November
Materials purchases …………………………..
$240,000
$225,000
$200,000
Cash payments for
$100,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1250
Problem 20-6AA (continued)
Part 3
ONEIDA COMPANY
Cash Budget
September
October
November
Beginning balance ………………………………
$ 5,000
$110,500
$ 88,000
Add: Cash receipts from sales (part 1) ……
150,500
239,500
337,500
Total cash available …………………………….
155,500
350,000
425,500
100,000
1,000
145,000
262,000
273,000
Loan activity
Additional loan ………………………………….
$100,000
Repayment of loan …………………………….
________
_______
100,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1251
Problem 20-7AA (50 minutes)
Part 1
AZTEC COMPANY
Schedule of Cash Receipts from Sales
May
June
July
Sales ……………………………………………………..
$360,000
$1,080,000
$ 900,000
Collections of current period sales (30%) …
Collections of prior period sales (70%) ….
Part 2
Ratio of inventory to future sales ………………………..
1,000
AZTEC COMPANY
Merchandise Purchases Budgets
June
July
Budgeted sales units ……………………………………………..
6,000
5,000
Add: Desired ending inventory
Next period budgeted sales units ………………………..
5,000
3,800
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1252
Problem 20-7AA (Continued)
Part 3
AZTEC COMPANY
Schedule of Cash Payments for Merchandise Purchases
May
June
July
Merchandise purchases
$308,000
$638,000
$523,600
Cash payments for
$382,800
$314,160
123,200
Part 4
AZTEC COMPANY
Cash Budget
June
July
Beginning cash balance …………………………………….
$100,000
$ 100,000
Add: Cash receipts from sales …………………………...
576,000
1,026,000
Total cash available …………………………………………..
676,000
1,126,000
Less: Cash payments for
Merchandise purchases …………………………………..
506,000
110,000
250
Total cash payments ………………………………………..
616,250
$ 59,750
Loan activity
Additional loan ……………………………………………….
$ 40,250
$ 0
Repayment of loan ………………………………………….
0
65,250
$100,000
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1253
Problem 20-8AA (130 minutes)
Part 1
DIMSDALE SPORTS
Sales Budgets
January
February
March
Totals
Budgeted sales units ………..
7,000
9,000
11,000
27,000
Part 2
DIMSDALE SPORTS
Merchandise Purchases Budgets
January
February
March
Total
Budgeted sales units ……………………….
7,000
9,000
11,000
Add: Desired ending inventory
Next period budgeted sales units ….
9,000
11,000
10,000
Ratio of inventory to future sales …..
x 20%
x 20%
x 20%
Desired ending inventory units ……..
Total required units ………………………….
8,800
11,200
13,000
Less: Beginning inventory units ………
Units to purchase …………………………….
Cost of merchandise purchases ……….
Part 3
DIMSDALE SPORTS
Selling Expense Budgets
January
February
March
Total
Budgeted sales ………………………..
$385,000
$495,000
$605,000
Sales commissions ………………….
$297,000
Sales salaries …………………………..
1254
Problem 20-8AA (Continued)
Part 4
DIMSDALE SPORTS
General and Administrative Expense Budgets
January
February
March
Total
Salaries ………………………………………
$12,000
$12,000
$12,000
$36,000
Maintenance ……………………………….
Depreciation ……………………………….
Part 5
DIMSDALE SPORTS
Capital Expenditures Budgets
January
February
March
Equipment purchases …………………………….
$36,000
$96,000
$ 28,800
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1255
Problem 20-8AA (Continued)
Part 6
DIMSDALE SPORTS CO.
Cash Budget
January
February
March
Beginning cash balance ………………………….
$ 36,000
$ 30,100
$210,300
Add: Cash receipts from sales (given) ……….
221,250
697,000
489,500
Total cash available ………………………………..
257,250
727,100
699,800
Less: Cash payments for
302,800
147,600
121,000
150,000
Loan activity
Repayment of loan ………………………………….
$ 15,000
$ 0
$ 0
Ending cash balance ……………………………….
$ 30,100
$210,300
$143,400
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1256
Problem 20-8AA (Continued)
Part 7
DIMSDALE SPORTS
Budgeted Income Statement
For Three Months Ended March 31
Sales …………………………………………………………………..
$1,485,000
Cost of goods sold (27,000 units x $30) ………………..
810,000
Gross profit …………………………………………………………
675,000
Income before income taxes ………………………………..
300,550
Part 8
DIMSDALE SPORTS CO.
Budgeted Balance Sheet
March 31
ASSETS
Cash ………………………………………………
$ 143,400
Cash budget
Accounts receivable ………………………
602,250
Note A
Note B
Equipment ……………………………………..
Note C
Accounts payable …………………………..
Note E
Taxes payable (due April 15) …………..
$ 669,820
Income stmt.
Equity
Common stock …………………………..….
Retained earnings ………………………….
Note F
1257
Problem 20-8AA (Concluded)
Supporting Footnotes
Note A
Beginning accounts receivable …………………………...
$ 525,000
Credit sales ………………………………………………………..
1,485,000
Less cash receipts from sales (from part 6) ………….
(1,407,750)
Ending accounts receivable ………………………………..
$ 602,250
Note B
Beginning merchandise inventory ……………………….
$ 150,000
Purchases ………………………………………………………….
Less cost of goods sold ………………………………………
(810,000)
Ending merchandise inventory* …………………………..
$ 60,000
*Also equals 2,000 units x $30 = $60,000
Note C
Beginning equipment ………………………………………….
$ 540,000
Purchased in January …………………………………………
36,000
Purchased in February ………………………………………..
96,000
Purchased in March ……………………………………………
28,800
Ending equipment ………………………………………………
$ 700,800
Note D
Beginning accumulated depreciation …………………..
$ 67,500
Depreciation expense………………………………………….
20,300
Ending accumulated depreciation ………………………..
$ 87,800
Note E
Beginning accounts payable ……………………………….
$ 360,000
Purchases (from part 3) ………………………………………
Cash payments for purchases (from part 6) ………….
(530,400)
Ending accounts payable ……………………………………
$ 549,600
Note F
Beginning retained earnings ……………………………….
$ 246,000
Net income …………………………………………………………
180,330
Ending retained earnings …………………………………….
$ 426,330
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1258
PROBLEM SET B
Problem 20-1B (30 minutes)
Part 1
NSA COMPANY
Production Budget (in units)
Second Quarter
Budgeted sales units …………………………………………………………..
250,000
Add: Desired ending inventory units ……………………………………
Total required units ……………………………………………………………..
256,000
Part 2
NSA COMPANY
Direct Materials Budget
Second Quarter
Units to produce ………………………………………………………………….
248,000
Materials required per unit (lbs.) …………………………………………..
x 3
Materials needed for production (lbs.) ………………………………….
744,000
12,000
Total materials required (lbs.) ………………………………………………
756,000
Materials cost per pound ……………………………………………………..
1259
Problem 20-1B (concluded)
Part 3
NSA COMPANY
Direct Labor Budget
Second Quarter
Units to produce ………………………………………………………
248,000
Direct labor hours needed ………………………………………..
124,000
Part 4
NSA COMPANY
Factory Overhead Budget
Second Quarter
Direct labor hours needed ………………………………………..
124,000
1260
Problem 20-2B (30 minutes)
Part 1
A1 MANUFACTURING
Schedule of Cash Receipts from Sales
July
August
Sept.
Sales ……………………………………………………..
$63,400
$80,600
$48,600
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1261
Problem 20–2B (continued)
Part 2
A1 MANUFACTURING
Cash Budget
July
August
Sept.
Beginning cash balance* ……………………
$12,900
$12,900
$24,368
Add: Cash receipts (from part 1) ………..
59,680
66,840
74,200
Total cash available …………………………..
72,580
79,740
98,568
Less: Cash payments for
Direct materials ……………………………….
12,480
10,140
Direct labor ……………………………………..
10,400
Overhead …………………………………………
18,720
14,850
15,210
Sales commissions (10% of sales) ……
Interest on loan
July ($2,600 x 1%)* ………………………..
August ($2,586 x 1%)** …………………..
26
0
0
26
0
0
Total cash payments ………………………..
59,666
52,786
50,360
Preliminary cash balance ………………….
$12,914
$26,954
$48,208
Loan activity
Additional loan ………………………………….
Repayment of loan …………………………….
2,586
Ending cash balance ………………………….
$12,900
$24,368
$48,208
Wild and Shaw, Financial & Managerial Accounting 9e Solutions Manual: Chapter 20
1262
Problem 20-3B (50 minutes)
Part 1
HOG Company
Budgeted Income Statement
July
August
September
Sales* …………………………..…………………
$1,265,000
$1,391,500
$1,530,650
Cost of goods sold* ………………………..
660,000
726,000
798,600
Gross profit …………………………………….
605,000
665,500
732,050
Selling, general, and admin. expenses
250,000
250,000
250,000
* Sales units, Sales, and Cost of goods sold for the next three months:
Sales
Cost of Goods
Units
($115/unit)
Sold ($60/unit)
July ………………………………..
11,000
$1,265,000
$660,000
September ……………………..
13,310
Part 2: Analysis Component
No. Net income in September is budgeted to be higher than net income in
June.