![]() A formal statement of a company’s future plans, usually expressed in monetary terms.Ĩ. A plan that shows the units or costs of merchandise to be purchased by a merchandising company during the budget period.ħ. An accounting report that presents predicted amounts of the company’s assets, liabilities, and equity balances at the end of the budget period.Ħ. An accounting report that presents predicted amounts of the company’s revenues and expenses for the budgeting period.ĥ. ![]() A plan showing the units of goods to be sold and the sales to be derived the usual starting point in the budgeting process.Ĥ. A quantity of inventory or materials over the minimum to reduce the risk of running short.ģ. A comprehensive business plan that includes specific plans for expected sales, the units of product to be produced, the merchandise or materials to be purchased, the expenses to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet.Ģ. General and administrative expense budgetġ. Match the definitions 1 through 9 with the term or phrase a through iį. ![]() Working note: Calculation of cash receipts from customer Budgeted balance sheet as of September 30, 2017.Budgeted income statement for the entire quarter (not for each month separately).General and administrative expense budget. ![]() Round calculations to the nearest whole dollar. All budgets and other financial information should be prepared for the third calendar quarter, except as otherwise noted below. Prepare the following budgets and other financial information as required. If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If necessary, the company borrows enough cash using a short-term note to reach the minimum. The minimum ending cash balance for all months is $40,000.Equipment purchases of $100,000 are budgeted for the last day of September.Income tax expense will be assessed at 35% in the quarter and paid in October. Income taxes payable at June 30 will be paid in July.Dividends of $20,000 are to be declared and paid in August.One month’s raw materials purchases are fully paid in the next month. All raw materials purchases are on credit, and no payables arise from any other transactions.Receivables are collected in full in the month following the sale (none are collected in the month of the sale). The company expects 30% of sales to be for cash and the remaining 70% on credit.The sales manager’s monthly salary is $3,500. Sales representatives’ commissions are 10% of sales and are paid in the month of the sales.Monthly general and administrative expenses include $9,000 administrative salaries and 0.9% monthly interest on the long-term note payable.Depreciation of $20,000 per month is treated as fixed factory overhead. The predetermined variable overhead rate is $2.70 per direct labor hour. Overhead is allocated based on direct labor hours.Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour.Each finished unit requires 0.50 units of raw materials. The budgeted September 30 raw materials inventory is 1,980 units. The June 30 raw materials inventory is 4,375 units (which also fails to meet the policy). Company policy calls for a given month’s ending raw materials inventory to equal 20% of the next month’s materials requirements.The June 30 finished goods inventory is 16,800 units, which does not comply with the policy. Company policy calls for a given month’s ending finished goods inventory to equal 70% of the next month’s expected unit sales.The product’s selling price is $17 per unit and its total product cost is $14.35 per unit. Forecasted sales in units are as follows: July, 21,000 August, 19,000 September, 20,000 and October, 24,000. To prepare a master budget for July, August, and September of 2017, management gathers the following information: The management of Nabar Manufacturing prepared the following estimated balance sheet for June 2017:
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