Question
In: Accounting
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....
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 | $ | 92,200 |
| Accounts receivable | 52,400 | |
| Inventory | 40,800 | |
| Buildings and equipment, net of depreciation | 219,000 | |
| Total assets | $ | 404,400 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ | 34,400 |
| Common stock | 100,000 | |
| Retained earnings | 270,000 | |
| Total liabilities and stockholders’ equity | $ | 404,400 |
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 accounts payable at June 30 will be paid in July.
- The budgeted inventory balance at July 31 is $10,700.
- Depreciation expense is $4,380 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 $93,200, expected cash disbursements for merchandise purchases of $44,700, and cash paid for selling and administrative expenses of $22,820.
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
| 1.) | For the month of July:- | ||||||
| a.) | Budgeted Sales:- | ||||||
| Cash Collection | 93,200 | ||||||
| Less: Receipt of accounts receivable of June 30 | -52,400 | ||||||
| Balance related to July Sale | 40,800 | ||||||
| Budgeted Sale of July = | ( 40,800 X 100 / 30) | ||||||
| = | 1,36,000 | ||||||
| b.) | Budgeted Merchandise purchases:- | ||||||
| Cash disbursement for merchandise | 44,700 | ||||||
| Less: Receipt of accounts receivable of June 30 | -34,400 | ||||||
| Balance related to July Purchase | 10,300 | ||||||
| Budgeted Merchandise purchase = | ( 10,300 X 100) / 20 | ||||||
| = | 51,500 | ||||||
| C.) | Budgeted Cost of goods sold:- | ||||||
| Cost of goods sold = | Opening Inventory + Purchases - Closing Inventory | ||||||
| = | 40,800 + 51,500 - 10,700 | ||||||
| = | 81,600 | ||||||
| d.) | Budgeted Net operating Income:- | ||||||
| Budgeted Sales | 1,36,000 | ||||||
| Less: Budgeted Cost of good sold | -81,600 | ||||||
| Gross Profit | 54,400 | ||||||
| Less: Selling & Administrative expenses | -22,820 | ||||||
| Les: Depreciation | -4,380 | ||||||
| Net Operating Income | 27,200 | ||||||
| 2.) | Budgeted Balance as of July 31 | ||||||
| Assets | Amount | ||||||
| Cash | 1,17,880 | ||||||
| Accounts Receivable | 95,200 | ||||||
| Inventory | 10,700 | ||||||
| Building & equipment , net of depreciation | 2,14,620 | ||||||
| Total Assets | 4,38,400 | ||||||
| Liabilities & Stockholder's equity | |||||||
| Accounts Payable | 41,200 | ||||||
| Common Stock | 1,00,000 | ||||||
| Retained Earnings | 2,97,200 | ||||||
| Total Liabilities & Stockholder's equity | 4,38,400 | ||||||
 ekkarill92 answered 1 year agoRelated SolutionsWolfpack Company is a merchandising company that is preparing a budget for the month of July....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
58,600
Inventory
43,000
Buildings and
equipment, net of depreciation
205,000
Total
assets
$
381,600
Liabilities and Stockholders’ Equity
Accounts
payable
$
68,600
Common
stock
100,000
Retained
earnings
213,000
Total
liabilities and stockholders’ equity
$
381,600
Budgeting
Assumptions:
All sales are on account. Thirty percent of the...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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 $
77,000 Accounts receivable 58,200 Inventory 32,800 Buildings and
equipment, net of depreciation 186,000 Total assets $ 354,000
Liabilities and Stockholders’ Equity Accounts payable $ 39,000
Common stock 100,000 Retained earnings 215,000 Total liabilities
and stockholders’ equity $ 354,000
Budgeting Assumptions:
All sales are on account. Thirty percent of the...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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
$
91,400
Accounts receivable
67,200
Inventory
31,000
Buildings and equipment, net of
depreciation
165,000
Total assets
$
354,600
Liabilities and
Stockholders’ Equity
Accounts payable
$
62,600
Common stock
100,000
Retained earnings
192,000
Total liabilities and
stockholders’ equity
$
354,600
Budgeting Assumptions:
1. All sales are on account. Thirty percent of...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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
$
91,400
Accounts receivable
55,600
Inventory
48,800
Buildings and equipment, net of depreciation
237,000
Total assets
$
432,800
Liabilities and Stockholders’ Equity
Accounts payable
$
32,800
Common stock
100,000
Retained earnings
300,000
Total liabilities and stockholders’ equity
$
432,800
Budgeting Assumptions:
All sales are on account. Thirty percent of the...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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
$
78,400
Accounts receivable
65,800
Inventory
35,200
Buildings and equipment, net of depreciation
214,000
Total assets
$
393,400
Liabilities and Stockholders’ Equity
Accounts payable
$
60,400
Common stock
100,000
Retained earnings
233,000
Total liabilities and stockholders’ equity
$
393,400
Budgeting Assumptions:
All sales are on account. Thirty percent of the...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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
$
91,400
Accounts receivable
67,200
Inventory
31,000
Buildings and equipment, net of
depreciation
165,000
Total assets
$
354,600
Liabilities and
Stockholders’ Equity
Accounts payable
$
62,600
Common stock
100,000
Retained earnings
192,000
Total liabilities and
stockholders’ equity
$
354,600
Budgeting Assumptions:
All sales are on account. Thirty percent of the...
Wolfpack Company is a merchandising company that is preparing a budget for the month of July....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
$
75,800
Accounts receivable
59,000
Inventory
43,400
Buildings and equipment, net of
depreciation
223,000
Total assets
$
401,200
Liabilities and
Stockholders’ Equity
Accounts payable
$
63,200
Common stock
100,000
Retained earnings
238,000
Total liabilities and
stockholders’ equity
$
401,200
Budgeting Assumptions:
All sales are on account. Thirty percent of the...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...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
$
60,200
Accounts receivable
30,800
Inventory
60,400
Buildings and equipment, net of
depreciation
124,000
Total assets
$
275,400
Liabilities
and Stockholders’ Equity
Accounts payable
$
71,100
Common stock
70,000
Retained earnings
134,300
Total liabilities and
stockholders’ equity
$
275,400
Budgeted
Income Statements
April
May
June
Sales
$
168,000
$...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...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
$
58,600
Accounts receivable
33,200
Inventory
40,000
Buildings and equipment, net of
depreciation
142,000
Total assets
$
273,800
Liabilities
and Stockholders’ Equity
Accounts payable
$
69,200
Common stock
70,000
Retained earnings
134,600
Total liabilities and
stockholders’ equity
$
273,800
Budgeted
Income Statements
April
May
June
Sales
$
100,000
$...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...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
$
68,800
Accounts receivable
34,000
Inventory
64,600
Buildings and equipment, net of depreciation
122,000
Total assets
$
289,400
Liabilities and Stockholders’
Equity
Accounts payable
$
96,500
Common stock
70,000
Retained earnings
122,900
Total liabilities and stockholders’ equity
$
289,400
Budgeted Income Statements
April
May
June
Sales
$
182,000
$...
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