Question

In: Accounting

Ch 8 algo 1 Exercise 8-18 (REV) Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2,...

Ch 8 algo 1 Exercise 8-18 (REV) Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-9, LO8-10]

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information:

Wolfpack Company
Balance Sheet
June 30
Assets
Cash $ 83,600
Accounts receivable 69,600
Inventory 44,200
Buildings and equipment, net of depreciation 158,000
Total assets $ 355,400
Liabilities and Stockholders’ Equity
Accounts payable $ 37,400
Common stock 100,000
Retained earnings 218,000
Total liabilities and stockholders’ equity $ 355,400

Budgeting Assumptions:

All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July.

All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase.

The budgeted inventory balance at July 31 is $36,600.

Depreciation expense is $3,160 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.

The company’s cash budget for July shows expected cash collections of $98,400, expected cash disbursements for merchandise purchases of $47,400, and cash paid for selling and administrative expenses of $16,040.

Required:

1. For the month of July, calculate the following:

a. Budgeted sales

b. Budgeted merchandise purchases

c. Budgeted cost of goods sold

d. Budgeted net operating income

2. Prepare a budgeted balance sheet as of July 31.

Solutions

Expert Solution

Budgeted Sales

July 30.

(A)

Total Cash Collections

$    98,400.00

(B)

Less: Amount of june

$    69,600.00

(C )

Collection for July sales

$    28,800.00

(D)

%of sales collection in current month

30%

(C/D)

Total Sales of July

$    96,000.00

Budgeted Purchases

July 30.

(A)

Total Cash Disbursement for merchandise purchase

$ 47,400.00

(B)

Less: payment for June

$ 37,400.00

(C )

Payment for july purchase

$ 10,000.00

(D)

% of Payment for purchase made in same month

20%

(C/D)

Total Purchase for July

$ 50,000.00

Budgeted Cost of Goods Sold

Opening Inventory

$    44,200.00

Purchases during Month

$    50,000.00

Goods Available for sale

$    94,200.00

Less: Closing Inventory

$    36,600.00

CoGS

$    57,600.00

Budgeted net Operating income

sales revenue

$ 96,000.00

Less: CoGS

$ 57,600.00

Gross Profit

$ 38,400.00

Operating expenses

Depreciation

$    3,160.00

Selling and Administrative expenses

$ 16,040.00

Net Operating income

$ 19,200.00

Budgeted Balance Sheet

Assets

Cash*

$ 118,560.00

Accounts Receivables(70% of sales)

$    67,200.00

Inventory

$    36,600.00

Buildings and equipment, net of depreciation

$ 154,840.00

Total Assets

$ 377,200.00

Liabilities and Stockholders’ Equity

Accounts Payable(80% of Purchases)

$    40,000.00

Common Stock

$ 100,000.00

Retained Earnings

$ 237,200.00

Total liabilities and stockholders’ equity

$ 377,200.00

*Cash balance $83600+98400-47400-16040


Related Solutions

Exercise 8-18 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-9, LO8-10] Wolfpack Company...
Exercise 8-18 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-9, LO8-10] Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information: Wolfpack Company Balance Sheet June 30 Assets Cash $ 79,200 Accounts receivable 68,600 Inventory 40,200 Buildings and equipment, net of depreciation 213,000 Total assets $ 401,000 Liabilities and Stockholders’ Equity Accounts payable $ 56,000 Common stock 100,000 Retained earnings 245,000 Total liabilities and stockholders’...
Exercise 8-18 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-9, LO8-10] Wolfpack Company...
Exercise 8-18 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-9, LO8-10] Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information: Wolfpack Company Balance Sheet June 30 Assets Cash $ 75,000 Accounts receivable 50,000 Inventory 30,000 Buildings and equipment, net of depreciation 150,000 Total assets $ 305,000 Liabilities and Stockholders’ Equity Accounts payable $ 35,300 Common stock 100,000 Retained earnings 169,700 Total liabilities and stockholders’...
Exercise 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-9, LO8-10] Wheeling...
Exercise 8-17 Cash Flows; Budgeted Income Statement and Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-9, LO8-10] Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below: Wheeling Company Balance Sheet September 30 Assets Cash $ 59,000 Accounts receivable 90,000 Inventory 32,400 Buildings and equipment, net of depreciation 214,000 Total assets $ 395,400 Liabilities and Stockholders’ Equity Accounts payable $ 73,000 Common stock 216,000 Retained earnings 106,400 Total liabilities and stockholders’ equity $ 395,400 The...
Problem 8-19 (REV) Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company...
Problem 8-19 (REV) Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 11,100 Accounts receivable 72,500 Inventory 37,500 Buildings and equipment, net of depreciation 238,000 Total assets $ 359,100 Liabilities and Stockholders’ Equity Accounts payable $ 68,000 Note payable 19,400 Common stock 180,000 Retained earnings 91,700 Total liabilities...
Problem 8-27 (Algo) Cash Collections; Cash Disbursements; Budgeted Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-10] Deacon Company...
Problem 8-27 (Algo) Cash Collections; Cash Disbursements; Budgeted Balance Sheet [LO8-2, LO8-3, LO8-4, LO8-10] Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 58,200 Accounts receivable 34,800 Inventory 68,500 Buildings and equipment, net of depreciation 118,000 Total assets $ 279,500 Liabilities and Stockholders’ Equity Accounts payable $ 95,000 Common stock 70,000 Retained earnings 114,500 Total liabilities and...
Exercise 8-12 and 13 Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO8-2,...
Exercise 8-12 and 13 Schedules of Expected Cash Collections and Disbursements; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-9, LO8-10] [The following information applies to the questions displayed below.] Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 90,000 Accounts receivable 136,000 Inventory 62,000 Plant and equipment, net of depreciation...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 12,000 Accounts receivable 77,500 Inventory 42,000 Buildings and equipment, net of depreciation 225,000 Total assets $ 356,500 Liabilities and Stockholders’ Equity Accounts payable $ 78,250 Note payable 19,300 Common stock 180,000 Retained earnings 78,950 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 12,000 Accounts receivable 77,500 Inventory 42,000 Buildings and equipment, net of depreciation 225,000 Total assets $ 356,500 Liabilities and Stockholders’ Equity Accounts payable $ 78,250 Note payable 19,300 Common stock 180,000 Retained earnings 78,950 Total liabilities and...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-19 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 9,200 Accounts receivable 76,250 Inventory 49,750 Buildings and equipment, net of depreciation 228,000 Total assets $ 363,200 Liabilities and Stockholders’ Equity Accounts payable $ 63,750 Note payable 23,900 Common stock 180,000 Retained earnings 95,550 Total liabilities and...
Problem 8-17 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is...
Problem 8-17 Cash Budget; Income Statement; Balance Sheet [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] Minden Company is a wholesale distributor of premium European chocolates. The company’s balance sheet as of April 30 is given below: Minden Company Balance Sheet April 30 Assets Cash $ 9,000 Accounts receivable 54,000 Inventory 30,000 Buildings and equipment, net of depreciation 207,000 Total assets $ 300,000 Liabilities and Stockholders’ Equity Accounts payable $ 63,000 Note payable 14,500 Common stock 180,000 Retained earnings 42,500 Total liabilities and...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT