# Managerial Accounting 1B Ch20

Question
Managerial Accounting 1B

Financial and Managerial Accounting

Don't use plagiarized sources. Get Your Custom Essay on
Managerial Accounting 1B Ch20
Just from \$13/Page

Chapter-20

1.

Exercise 20-5 Computing budgeted cash payments for purchases L.O. P1

Powerdyne Company’s cost of goods sold is consistently 60% of sales. The company plans to carry ending merchandise inventory for each month equal to 40% of the next month’s budgeted cost of good sold. All merchandise is purchased on credit, and 50% of the purchases made during a month is paid for in that month. Another 35% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase. Expected sales are: August (actual), \$150,000; September (actual), \$350,000; October (estimated), \$200,000; November (estimated), \$300,000.

Cash payments for purchases

2.

Exercise 20-6 Computing budgeted purchases and costs of goods sold L.O. P1

Sand Dollar Company purchases all merchandise on credit. It recently budgeted the following month-end accounts payable balances and merchandise inventory balances. Cash payments on accounts payable during each month are expected to be: May, \$1,300,000; June, \$1,450,000; July, \$1,350,000; and August, \$1,400,000.

Accounts
Payable

Merchandise Inventory

May 31

\$

120,000

\$

250,000

June 30

170,000

400,000

July 31

200,000

300,000

August 31

160,000

330,000

1.

Compute the budgeted amounts of merchandise purchases for June, July, and August.(Omit the “\$” sign in your response.)

June

July

August

Budgeted merchandise purchases

\$

\$

\$

2.

Compute the budgeted amounts of cost of goods sold for June, July, and August.(Omit the “\$” sign in your response.)

June

July

August

Budgeted cost of goods sold

\$

\$

\$

Explanation:

1.

Budgeted merchandise purchases

2.

Budgeted cost of goods sold

3.

Exercise 20-16 Cash budget L.O. P1

Kool-Ray is preparing its master budget for the quarter ended September 30. Budgeted sales and cash payments for merchandise for the next three months follow:

July

August

September

Budgeted sales

\$

64,000

\$

80,000

\$

48,000

Budgeted cash payments for merchandise

40,400

33,600

34,400

Sales are 20% cash and 80% on credit. All credit sales are collected in the month following the sale. The June 30 balance sheet includes balances of \$12,000 in cash; \$45,000 in accounts receivable; \$4,500 in accounts payable; and a \$2,000 balance in loans payable. A minimum cash balance of \$12,000 is required. Loans are obtained at the end of any month when a cash shortage occurs. Interest is 1% per month based on the beginning of the month loan balance and is paid at each month-end. If an excess balance of cash exists, loans are repaid at the end of the month. Operating expenses are paid in the month incurred and consist of sales commissions (10% of sales), office salaries (\$4,000 per month), and rent (\$6,500 per month).

(1)

Prepare a cash receipts budget for July, August, and September. (Input all amounts as positive values. Omit the “\$” sign in your response.)

(2)

Prepare a cash budget for each of the months of July, August, and September.(Input all amounts as positive values. Round your answers to the nearest dollar amount. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

Problem 20-5A: Preparation of a complete master budget L.O. C2, P1, P2

[The following information applies to the questions displayed below.]

Near the end of 2011, the management of Simid Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2011.

To prepare a master budget for January, February, and March of 2012, management gathers the following information.

a.

Simid Sports’ single product is purchased for \$30 per unit and resold for \$55 per unit. The expected inventory level of 2,500 units on December 31, 2011, is more than management’s desired level for 2012, which is 20% of the next month’s expected sales (in units). Expected sales are: January, 3,500 units; February, 4,500 units; March, 5,500 units; and April, 5,000 units.

b.

Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, \$62,500 is collected in January and the remaining \$200,000 is collected in February.

c.

Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2011, accounts payable balance, \$40,000 is paid in January and the remaining \$140,000 is paid in February.

d.

Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are \$30,000 per year.

e.

General and administrative salaries are \$72,000 per year. Maintenance expense equals \$1,000 per month and is paid in cash.

f.

Equipment reported in the December 31, 2011, balance sheet was purchased in January 2011. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, \$18,000; February, \$48,000; and March, \$14,400. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month’s depreciation is taken for the month in which equipment is purchased.

g.

The company plans to acquire land at the end of March at a cost of \$75,000, which will be paid with cash on the last day of the month.

h.

Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of \$12,500 in each month.

i.

The income tax rate for the company is 40%. Income taxes on the first quarter’s income will not be paid until April 15.

4.Problem 20-5A Part 1

1.

Monthly sales budgets.(Omit the “\$” sign in your response.)

5. Problem 20-5A Part 2
2.

Monthly merchandise purchases budgets.(Units to be deducted should be indicated with a minus sign. Omit the “\$” & “%” signs in your response.)

6.Problem 20-5A Part 3

3.

Monthly selling expense budgets.(Omit the “\$” & “%” signs in your response.)

7.Problem 20-5A Part 4

4.

Monthly general and administrative expense budgets.(Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Omit the “\$” sign in your response.)

Explanation:

Depreciation expense calculations

8.

Problem 20-5A Part 5

5.

Monthly capital expenditures budgets.(Leave no cells blank – be certain to enter “0” wherever required. Input all amounts as positive values. Omit the “\$” sign in your response.)

9.

Problem 20-5A Part 6

6.

Monthly cash budgets.(Leave no cells blank – be certain to enter “0” wherever required. Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Omit the “\$” sign in your response.)

10.Problem 20-5A Part

11.Problem 20-5A Part 8

8.

Budgeted balance sheet as of March 31, 2012.(Input all amounts as positive values. Be sure to list the assets in order of their liquidity. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

## Calculate the price of your order

Total price:
\$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

## Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.