MGT ACCTS

managerial_acct_mod_6.xls

C

0

8

–

29

budget:

per unit

$ 8 $ 8 $ 8

sales

Correct! Correct! Correct!

$ 48,000

140,000

280,000

120,000 120,000

Correct! Correct! Correct! Correct!

Budgeted sales in units
0 0 0 0

0 0 0 0

CRAVAT SALES COMPANY

Budget

April May June Quarter

35,000 45,000 60,000 140,000

22,000 22,000

14,000

3,000 3,000

4,000 4,000 4,000 12,000

0 0 0 0

CRAVAT SALES COMPANY

Sales
Salaries and wages 22,000
Utilities 14,000

expired

Miscellaneous 3,000
0

CRAVAT SALES COMPANY

June 30
Cash
–

, purchases

, no par

–

May sales
June sales
Total

–

Total

12,000

0

Student Name:

AllenR.mod.4

Class:

Case 08-29

CRAVAT SALES COMPANY

Budgets

April

May

June

Quarter

1a.

Sales

Budgeted sales in units

35,000

45,000

60,000

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40,000

Selling price

$ 8

Total

$

280,000

$ 360,000

$ 480,000

$ 1,

1

20,000

Correct!

1b. Schedule of expected cash collections:

February sales

$ 48,000

March sales

1

12,000

56,000

168,000

April sales

70,000

$ 70,000

May sales

90,000

180,000

270,000

June sales

Total cash collections

$ 230,000

$ 286,000

$ 370,000

$ 886,000

1c. Merchandise purchases budget:

Add budgeted ending inventory

Total needs

Less beginning inventory

Required unit purchases

Unit cost

Required dollar purchases

1d. Budgeted cash disbursements for merchandise purchases:

March purchases

April purchases

May purchases

June purchases

Total cash payments

2.

Cash

For the Three Months Ending

June 30

Cash balance, beginning

Add receipts from customers

Total cash available

Less disbursements:

Purchase of inventory

Sales commissions

Salaries and wages

22,000

66,000

Utilities

1

4,000

14,000

42,000

Miscellaneous

3,000

9,000

Dividends paid

Land purchases

25,000

Total disbursements

Excess (deficiency) of receipts

over disbursements

Financing:

Borrowings

Repayments

Interest

Total financing

Cash balance, ending

3.

Budgeted Income Statement

For the Three Months Ended June 30

Sales in units

Variable expenses:

Cost of goods sold

Commissions

Contribution margin

Fixed expenses:

Insurance

Depreciation

1,500

Net operating income

Less interest expense

Net income

4.

Budgeted Balance Sheet

Assets

Accounts receivable

Inventory

Unexpired insurance

Fixed assets, net of depreciation

Total assets

Liabilities and Stockholders’ Equity

Accounts payable

Dividends payable

Loans payable, bank

Capital stock

Retained earnings

Total liabilities and equity

Accounts receivable at June 30:

Retained earnings at June 30:

Balance, March 31

$ 14,000

Add net income

Less dividends declared

Balance, June 30

Enter the appropriate data in the yellow cells. Your final answers for each section will be verified.
Enter the appropriate data in the yellow cells. Your answers for “Cash balance, ending” will be verified.
Enter the appropriate data in the yellow cells. Your answer for “Net income” will be verified.
Enter the appropriate data in the yellow cells. Your answer for “Total assets” will be verified.
HINT: Use calculation below.
HINT: Use calculation below.

Given C08-29

CRAVAT SALES COMPANY

Selling price $ 8

20,000

April 35,000
May 45,000
June 60,000

40,000

50%

50%

25%

Utilities $ 14,000
Insurance

Depreciation

Miscellaneous

Assets

Cash $ 14,000

Accounts receivable

February sales $ 48,000
March sales 168,000

Fixed assets, net of depreciation

Total assets

Liabilities and Stockholders’ Equity

Accounts payable

Dividends payable 12,000
Capital stock

Retained earnings

$ 574,600

$ 1,000

$ 10,000

Given Data Case 08-29:
Minimum ending cash balance		$ 10,000
Recent and forecast sales (in units):
January (actual)
February (actual)	24,000
March (actual)	28,000
July
August	36,000
September	32,000
Desired ending inventories (percentage	90%
of next month’s sales)
Cost of earrings	$ 5
Purchases paid as follows:
In month of purchase			50%
In following month
Collection on sales:
Sales collected current month		25%
Sales collected following month
Sales collected 2nd month following
Variable monthly expenses:
Sales commissions (per tie)	$ 1.00
Fixed monthly expenses:
Wages and salaries	$ 22,000
$ 1,200
$ 1,500
$ 3,000
Land purchased in May	$ 25,000
Dividends declared each quarter	$ 12,000
Balance sheet at March 31:
216,000
Inventory (31,500 units)	157,500
Prepaid insurance	14,400
172,700
	$ 574,600
$ 85,750
300,000
176,850
Total liabilities and stockholders’ equity
Agreement with Bank:
Borrowing increments		$ 1,000
Maximum borrowing amount	$ 40,000
Interest rate per month	1%
Repayment increments
Total of interest paid each quarter	100%
Required minimum cash balance