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1.
June July August
Estimated cash receipts from:
Cash sales
Collections from accounts receivable
Total cash receipts
Estimated cash payments for:
Manufacturing costs
Selling and administrative expenses
Capital expenditures
Other purposes:
Income tax
Dividends
Total cash payments
Cash increase (decrease)
Cash balance at beginning of month
Cash balance at end of month
Minimum cash balance
Excess (deficiency)
Supporting calculations:
Collections of accounts receivable:
Sales on
Account Percentage June July August
April sales
May sales:
Collected in June
Collected in July
June sales:
Collected in July
Collected in August
July sales
Payments for manufacturing costs:
Costs on
Account Percentage Payments
Paid in June:
Incurred in May
Incurred in June
Total
Paid in July:
Incurred in June
Incurred in July
Total
Paid in August:
Incurred in July
Incurred in August
0%
Problem 22-4B
Name:
Section:
Score:
MERCURY SHOES INC.
Cash Budget
For the Three Months Ending June 30, 2016
Key Code:
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Instructions
Total
2.
[Key essay answer here]
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1.
June July August
Estimated cash receipts from:
Cash sales 16,000$ 18,500$ 20,000$
Collections from accounts receivable 138,000 146,400 157,500
Total cash receipts 154,000$ 164,900$ 177,500$
Estimated cash payments for:
Manufacturing costs 56,200$ 66,800$ 88,400$
Supporting calculations:
Collections of accounts receivable:
Sales on
Account Percentage
June July August
April sales 120,000$ 40% 48,000$ –$ –$
May sales:
Collected in June 150,000 60% 90,000 – –
Collected in July 150,000 40% – 60,000 –
Payments for manufacturing costs:
Costs on
Account Percentage Payments
Paid in June:
Incurred in May 13,000$
Incurred in June 54,000 80% 43,200
Total 56,200$
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Problem 22-4B
Name:
Solution
Section:
Score:
Instructions
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ON
MERCURY SHOES INC.
Cash Budget
For the Three Months Ending June 30, 2016
Key Code:
Incurred in August 93,000 80% 74,400
2.
The budget indicates that the minimum cash balance will not be maintained in August. This is due
to the capital expenditures requiring significant cash outflows during this month. This situation can
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1.
Sales
Cost of goods sold:
Direct materials
Direct labor
Factory overhead
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses:
Sales salaries and commissions
Advertising
Miscellaneous selling expense
Total selling expenses
Administrative expenses:
Office and officers salaries
Supplies
Miscellaneous admin. expenses
Total administrative expenses
Total operating expenses
Income before income tax
Income tax expense
Net income
Supporting calculations for budgeted income statement:
Factory overhead: Office and officers salaries:
Variable overhead Fixed portion
Depreciation Variable portion
Other Total
Total
Sales salaries and commissions: Supplies expense:
Fixed portion Fixed portion
Variable portion Variable portion
Total Total
Miscellaneous selling expenses: Miscellaneous administrative expenses:
Fixed portion Fixed portion
Variable portion Variable portion
Total Total
2.
Budgeted Balance Sheet
REGINA SOAP CO.
Budgeted Income Statement
For the Year Ending December 31, 2017
0%
Score:
Key Code:
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Instructions
REGINA SOAP CO.
Problem 22-5A
Name:
Section:
Current assets:
Cash
Accounts receivable
Inventories:
Finished goods
Work in process
Materials
Prepaid expenses
Total current assets
Property, plant, and equipment:
Plant and equipment
Less accumulated depreciation
Total assets
Current liabilities:
Accounts payable
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
Supporting calculations for budgeted balance sheet:
Cash balance:
Balance, January 1, 2017
Plus cash from operations:
Net income (from budgeted income statement)
Depreciation (add back noncash item)
Less planned nonoperating cash outflows:
Dividends to be paid in 2017
Plant and equipment to be acquired in 2017
Balance, December 31, 2017
Retained earnings balance:
Balance, January 1, 2017
Plus expected net income for 2017
Less dividends to be paid in 2017
Balance, December 31, 2017
For the Year Ending December 31, 2017
Assets
Stockholders’ Equity
Liabilities
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1.
Sales
1,000,000$
Cost of goods sold:
Direct materials 220,000$
Gross profit 518,000$
Operating expenses:
Selling expenses:
Sales salaries and commissions 136,000$
Advertising 64,000
Total administrative expenses 135,400
Total operating expenses 391,400
Supporting calculations for budgeted income statement:
Factory overhead: Office and officers salaries:
Variable overhead 80,000$ Fixed portion 72,400$
Depreciation 40,000 Variable portion 24,000
Sales salaries and commissions: Supplies expense:
Fixed portion 46,000$ Fixed portion 5,000$
Variable portion 90,000 Variable portion 20,000
2.
Instructions
Answers are entered in the cells with gray backgrounds.
ON
REGINA SOAP CO.
Budgeted Income Statement
For the Year Ending December 31, 2017
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Problem 22-5A
Name:
Solution
Section:
Score:
REGINA SOAP CO.
Budgeted Balance Sheet
Current assets:
Cash 135,800$
Accounts receivable 125,600
Inventories:
Finished goods 69,300$
Work in process 32,500
Current liabilities:
Accounts payable 62,000$
Common stock 180,000$
Supporting calculations for budgeted balance sheet:
Cash balance:
Balance, January 1, 2017 85,000$
Plus cash from operations:
Net income (from budgeted income statement) 96,600$
Retained earnings balance:
Balance, January 1, 2017 290,700$
Liabilities
Stockholders’ Equity
For the Year Ending December 31, 2017
Assets
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1.
Sales
Cost of goods sold:
Direct materials
Direct labor
Factory overhead
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses:
Sales salaries and commissions
Advertising
Miscellaneous selling expense
Total selling expenses
Administrative expenses:
Office and officers salaries
Supplies
Miscellaneous admin. expenses
Total administrative expenses
Total operating expenses
Income before income tax
Income tax expense
Net income
Supporting calculations for budgeted income statement:
Factory overhead: Office and officers salaries:
Variable overhead Fixed portion
Depreciation Variable portion
Other Total
Total
Sales salaries and commissions: Supplies expense:
Fixed portion Fixed portion
2.
MESA PUBLISHING CO.
Budgeted Income Statement
For the Year Ending December 31, 2017
MESA PUBLISHING CO.
Budgeted Balance Sheet
Problem 22-5B
Name:
Section:
0%
Score:
Key Code:
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Instructions
Current assets:
Cash
Accounts receivable
Inventories:
Finished goods
Work in process
Materials
Prepaid expenses
Total current assets
Property, plant, and equipment:
Plant and equipment
Less accumulated depreciation
Total assets
Current liabilities:
Accounts payable
Common stock
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
Supporting calculations for budgeted balance sheet:
Cash balance:
Balance, January 1, 2017
Plus cash from operations:
Net income (from budgeted income statement)
Depreciation (add back noncash item)
Less planned nonoperating cash outflows:
Dividends to be paid in 2017
Plant and equipment to be acquired in 2017
Balance, December 31, 2017
Retained earnings balance:
Balance, January 1, 2017
Plus expected net income for 2017
Less dividends to be paid in 2017
Balance, December 31, 2017
Assets
For the Year Ending December 31, 2017
Liabilities
Stockholders’ Equity
An asterisk (*) will appear to the right of an incorrect entry.
1.
Sales
456,000$
Cost of goods sold:
Direct materials 114,000$
Operating expenses:
Selling expenses:
Sales salaries and commissions 64,100$
Advertising 13,200
Total operating expenses 136,780
Income before income tax 149,660$
Supporting calculations for budgeted income statement:
Factory overhead: Office and officers salaries:
Variable overhead 18,240$ Fixed portion 7,800$
Depreciation 4,000 Variable portion 26,600
Sales salaries and commissions: Supplies expense:
Fixed portion 12,800$ Fixed portion 500$
Variable portion 51,300 Variable portion 4,560
2.
MESA PUBLISHING CO.
Budgeted Balance Sheet
For the Year Ending December 31, 2017
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Score:
Instructions
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ON
MESA PUBLISHING CO.
Problem 22-5B
Name:
Solution
Section:
Budgeted Income Statement
Current assets:
Cash 106,660$
Accounts receivable 23,800
Inventories:
Finished goods 16,900$
Work in process 4,200
Current liabilities:
Accounts payable 14,800$
Common stock 30,000$
Supporting calculations for budgeted balance sheet:
Cash balance:
Balance, January 1, 2017 26,000$
Plus cash from operations:
Retained earnings balance:
Balance, January 1, 2017 83,100$
Liabilities
Stockholders’ Equity
For the Year Ending December 31, 2017
Assets