1263
Problem 22-6A (50 minutes)
ONEIDA COMPANY
Cash Budget
For September, October, and November
September
October
November
Beginning balance ……………………………………
$ 5,000
$ 99,250
$ 69,500
Cash receipts
Supporting schedules
Collections of credit sales*
September
October
November
Aug. sales ($215,000)—[25%: 45%: 20%: 9%] …………….
$ 96,750
$ 43,000
$ 19,350
Sept. sales ($250,000)—[25%: 45%: 20%] …………………..
62,500
112,500
50,000
Oct. sales ($375,000)—[25%: 45%] …………………………..
Nov. sales ($400,000)—[25%] …………………………..
Payments on credit purchases**
September
October
Aug. purchases ($125,000)—(0%: 80%: 20%) …………………………..
$100,000
$ 25,000
Sept. purchases ($240,000)—(0%: 80%: 20%) …………………………..
192,000
48,000
Oct. purchases ($225,000)—(0%: 80%) …………………………..
Nov. purchases ($200,000)—(0%) …………………………..
–
1264
Problem 22-7A (70 minutes)
Part 1
Cash collections of credit sales (accounts receivable)
From sales in
Total
% Collected
June
July
April ……………………………………….
$ 720,000
28%
$201,600
May ………………………………………..
180,000
1,080,000
216,000
Part 2
Budgeted ending inventories (in units)
April
May
June
July
Next month’s budgeted sales units ………..
2,000
6,000
5,000
3,800
Budgeted “base” ending inventory ………..
1,200
1,000
Part 3
AZTEC COMPANY
Merchandise Purchases Budgets
For May, June, and July
May
June
July
Budgeted ending inventory units (part 2) ………
1,300
1,100
860
Required units of available merchandise …….
3,300
7,100
Budgeted purchases (units) ……………………….
1265
Problem 22-7A (Continued)
Part 4
Cash payments on product purchases (for June and July)
From purchases in
Total
% Paid
June
July
May …………………………………………
$308,000
40%
$123,200
314,160
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
Total available cash ……………………………………………….
697,600
920,800
Cash payments for:
43,650
1266
Problem 22-7A (Concluded)
Part 6
Information about the need for cash in the near future would be helpful to
the management of Aztec Company because they would be able to enter
1267
Problem 22-8A (130 minutes)
Part 1
DIMSDALE SPORTS CO.
Sales Budgets
January, February, and March 2018
Budgeted
Units
Budgeted
Unit Price
Budgeted
Total Dollars
January 2018 ………………………………………………..
$55
$ 385,000
Part 2
DIMSDALE SPORTS CO.
Merchandise Purchases Budgets
January, February, and March 2018
January
February
March
Total
Next month’s budgeted sales units …..
9,000
11,000
10,000
Ratio of inventory to future sales ………
x 20%
x 20%
x 20%
Add budgeted sales units …………………
8,800
11,200
13,000
Deduct beginning inventory units ……..
Units to be purchased ………………………
Budgeted cost per unit ……………………..
Part 3
DIMSDALE SPORTS CO.
Selling Expense Budgets
January, February, and March 2018
January
February
March
Total
Budgeted sales …………………………..
$385,000
$495,000
$605,000
Sales commission percent ………………
x 20%
Sales commissions expense ……………
$297,000
Sales salaries………………………………….
1268
Problem 22-8A (Continued)
Part 4
DIMSDALE SPORTS CO.
General and Administrative Expense Budgets
January, February, and March 2018
January
February
March
Total
Salaries ……………………………………………….
$12,000
$12,000
$12,000
$36,000
Depreciation* ……………………………………….
Part 5
DIMSDALE SPORTS CO.
Capital Expenditures Budgets
January, February, and March 2018
January
February
March
Equipment purchases …………………………………..
$36,000
$96,000
$ 28,800
Total ……………………………………………………….
$36,000
$96,000
1269
Problem 22-8A (Continued)
Part 6
DIMSDALE SPORTS CO.
Cash Budgets
January, February, and March 2018
January
February
March
Sales commissions …………………………………….
Sales salaries ……………………………………………..
5,000
5,000
5,000
General & administrative salaries ………………..
12,000
Maintenance expense …………………………………
2,000
2,000
2,000
Interest ($15,000 x 1%) ……………………………………..
150
Taxes payable …………………………………………….
90,000
Purchases of equipment …………………………..
28,800
Purchase of land …………………………………………
Supporting calculations
January
February
March
Total
Note A: Cash receipts from customers
Total sales …………………………………………………
$385,000
$495,000
$605,000
$1,485,000
Cash sales (25%) ……………………………………….
Credit sales (75%) ……………………………………..
Cash collections
Receivables at 12/31/2017 ………………………….
$125,000
$400,000
Month after sale (60%) …………………………..
173,250
$222,750
Second month (40%) ………………………………….
Total from credit customers ……………………….
125,000
573,250
338,250
Cash sales…………………………………………………
96,250
Credit purchases ……………………………………….
$114,000
$282,000
$324,000
Month after purchase (20%) ……………………….
$ 56,400
Second month (80%) ………………………………….
1270
Problem 22-8A (Continued)
Part 7
DIMSDALE SPORTS CO.
Budgeted Income Statement
For Three Months Ended March 31, 2018
Sales ……………………………………………………………………..
$1,485,000
Cost of goods sold (27,000 units @ $30) …………………
810,000
Gross profit …………………………………………………………..
675,000
Operating expenses
$297,000
374,450
Income before taxes ………………………………………………
300,550
Income taxes (40%) ……………………………………………….
120,220
Part 8
DIMSDALE SPORTS CO.
Budgeted Balance Sheet
March 31, 2018
Cash budget
Accounts receivable …………………………..
Note C
60,000
Note D
Total current assets …………………………..
Land ……………………………………………………
150,000
Capital budget
Equipment …………………………………………..
$700,800
Note E
Less accumulated depreciation ……………
613,000
Note F
Total assets …………………………………………
Accounts payable ………………………………..
Note G
Bank loan payable ……………………………….
Cash budget
Taxes payable (due 4/15/2018) ……………..
120,220
Income stmt.
Total liabilities ……………………………………..
Common stock …………………………………….
$472,500
Unchanged
Retained earnings ………………………………..
Note H
898,830
1271
Problem 22-8A (Concluded)
Supporting Footnotes
Note C
Beginning receivables ………………………………………………
$ 525,000
Credit sales ………………………………………………………………
Less collections ……………………………………………………….
Note D
Beginning inventory ………………………………………………….
$ 150,000
Purchases ………………………………………………………………..
Less cost of goods sold ……………………………………………
*Also equals 2,000 units @ $30 = $60,000
Note E
Beginning equipment ………………………………………………..
$ 540,000
Purchased in January ……………………………………………….
36,000
Purchased in February………………………………………………
Purchased in March ………………………………………………….
28,800
Note F
Beginning accumulated depreciation …………………………
$ 67,500
Depreciation expense ……………………………………………….
20,300
Note G
Beginning accounts payable ……………………………………..
$ 360,000
Purchases ………………………………………………………………..
Payments …………………………..…………………………………….
Note H
Beginning retained earnings …………………………..…………
$ 246,000
Net income …………………………..…………………………………..
180,330
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 22
1272
PROBLEM SET B
Problem 22-1B (30 minutes)
Part 1
NSA COMPANY
Production Budget (in units)
Second Quarter
Budgeted ending inventory (units) ……………………………………………….
6,000
Part 2
NSA COMPANY
Direct Materials Budget (in lbs, except where noted)
Second Quarter
Materials (aluminum) needed for production (248,000 x 3 lbs.) …..
744,000
Direct materials cost per pound ………………………………………………..
1273
Problem 22-1B (concluded)
Part 3
NSA COMPANY
Direct Labor Budget
Second Quarter
Units to be produced ………………………………………………………
248,000
Direct labor rate (per hour) ……………………………………………..
Part 4
NSA COMPANY
Factory Overhead Budget
Second Quarter
1274
Problem 22-2B (30 minutes)
(1)
A1 MANUFACTURING
Cash Receipts Budget
For July, August, and September
July
August
Sept.
1275
Problem 22-2B (continued)
(2)
A1 MANUFACTURING
Cash Budget
For July, August, and September
July
August
Sept.
Beginning cash balance* ……………………….
Cash receipts (from part 1) …………………….
59,680
74,200
Cash payments for:
Direct materials ……………………………………..
12,480
9,900
10,140
Direct labor ……………………………………………
10,400
Sales commissions (10% of sales) …………
1276
Problem 22-3B (50 minutes)
Part 1
HCS MFG.
Budgeted Income Statement
For Months of July, August, and September, 2017
July
August
September
Expenses
Sales commissions (10%) ………………….
126,500
139,150
153,065
Advertising ($200,000 x 1.25) …………….
250,000
250,000
250,000
* Volume for the next three months increases by 10% per month
Sales
Cost of Goods
Units
(@ $115)
Sold (@ $60)
$1,265,000
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
1277
Problem 22-4B (130 minutes)
Part 1
NABAR MANUFACTURING
Sales Budgets
July, August, and September 2017
Budgeted
Units
Budgeted
Unit Price
Budgeted
Sales Dollars
Part 2
NABAR MANUFACTURING
Production Budget
July, August, and September 2017
July
August
Sept.
Total
Next month’s budgeted sales ……………
19,000
20,000
24,000
1278
Problem 22-4B (continued)
Part 3
NABAR MANUFACTURING
Raw Materials Budget
July, August, and September 2017
July
August
Sept.
Total
Production budget (units) …………………
17,500
19,700
22,800
Add budgeted ending inventory ………..
Materials to be purchased ………………..
Part 4
NABAR MANUFACTURING
Direct Labor Budget
July, August, and September 2017
July
August
Sept.
Total
Part 5
NABAR MANUFACTURING
Factory Overhead Budget
July, August, and September 2017
July
August
Sept.
Total
1279
Problem 22-4B (continued)
Part 6
NABAR MANUFACTURING
Selling Expense Budgets
July, August, and September 2017
July
August
Sept.
Total
Budgeted sales …………………………..
$357,000
$323,000
$340,000
Part 7
NABAR MANUFACTURING
General and Administrative Expense Budgets
July, August, and September 2017
July
August
Sept.
Total
1280
Problem 22-4B (Continued)
Part 8
NABAR MANUFACTURING
Cash Budgets
July, August, and September 2017
July
August
Sept.
Sales commissions …………………………………….
35,700
32,300
34,000
Sales salaries ……………………………………………..
3,500
3,500
3,500
General & administrative salaries ………………..
9,000
9,000
9,000
25,620
Supporting calculations
July
August
Sept.
Total
Note A: Cash receipts from customers
Total sales …………………………………………………
$357,000
$323,000
$340,000
$1,020,000
Cash sales (30%) ……………………………………….
107,100
96,900
102,000
306,000
Cash collections
Month after sale (100%) …………………………..
$249,900
$249,900
$226,100
$ 725,900
Cash sales…………………………………………………
107,100
102,000
306,000
Total cash received ……………………………………
$357,000
$346,800
$328,100
$1,031,900
1281
Problem 22-4B (Continued)
Part 9
NABAR MANUFACTURING
Budgeted Income Statement
For Three Months Ended September 30, 2017
Sales …………………………..…………………………………………
$1,020,000
Cost of goods sold (60,000 units @ $14.35) …………….
861,000
Gross profit …………………………………………………………..
Income before taxes ………………………………………………
Part 10
NABAR MANUFACTURING
Budgeted Balance Sheet
September 30, 2017
ASSETS
Cash ……………………………………………………
$ 40,000
Cash budget
Accounts receivable …………………………..
Note C
Total current assets …………………………..
Equipment …………………………………………..
Less accumulated depreciation ……………
Note G
Total assets …………………………………………
LIABILITIES AND EQUITY
Accounts payable ………………………………..
$ 88,800
Note H
Bank loan payable ……………………………….
14,380
Cash budget
Taxes payable ……………………………………..
Income stmt.
Total current liabilities …………………………
Common stock …………………………………….
Retained earnings ………………………………..