Calgon Products, a distributor of organic beverages, needs a cash budget for September. The following information is available:

a.	The cash balance at the beginning of September is $14,700.
b.	Actual sales for July and August and expected sales for September are as follows:

	July		August		September
Cash sales	$	5,300	$	4,900	$	8,800
Sales on account		19,000		33,000		36,000
Total sales	$	24,300	$	37,900	$	44,800

	Sales on account are collected over a three-month period as follows: 5% collected in the month of sale, 65% collected in the month following sale, and 28% collected in the second month following sale. The remaining 2% is uncollectible.
c.	Purchases of inventory will total $25,000 for September. Thirty percent of a month's inventory purchases are paid for during the month of purchase. The accounts payable remaining from August's inventory purchases total $17,000, all of which will be paid in September.
d.	Selling and administrative expenses are budgeted at $15,000 for September. Of this amount, $3,000 is for depreciation.
e.	Equipment costing $18,000 will be purchased for cash during September, and dividends totaling $4,000 will be paid during the month.
f.	The company maintains a minimum cash balance of $10,700. An open line of credit is available from the company's bank to bolster the cash balance as needed.

Required:
1.	Prepare a schedule of expected cash collections for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
September cash sales	$
September collections on account:
July sales
August sales
September sales
Total cash collections	$

2.	Prepare a schedule of expected cash disbursements for inventory purchases for September. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Schedule of Expected Cash Disbursements
Payments to suppliers:
August purchases	$
September purchases
Total cash payments	$

3.

Prepare a cash budget for September. Indicate in the financing section any borrowing that will be needed during September. Assume that any interest will not be paid until the following month. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Calgon Products Cash Budget For the Month of September
Cash balance, beginning		$
Add cash receipts:
Collections from customers
Total cash available before current financing
Less disbursements:
Payments to suppliers for inventory	$
Selling and administrative expenses
Equipment purchases
Dividends paid
Total disbursements
Excess (deficiency) of cash available over disbursements
Financing:
Borrowings
Repayments
Interest
Total financing
Cash balance, ending		$

The following information applies to the questions displayed below.]

Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year as shown in the companys sales budget for the third quarter, given below:

	July	August	September	Total
Budgeted sales (all on account)	$587,000	$ 837,000	$ 458,000	$1,882,000

From past experience, the company has learned that 20% of a months sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. May sales totaled $405,000, and June sales totaled $533,000.

2.

Required information

Required:
1.	Prepare a schedule of expected cash collections from sales, by month and in total, for the third quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
	July	August	September	Total
May sales	$	$	$	$
June sales
July sales
August sales
September sales
Total cash collections	$	$	$	$

3.

Required information

2.	Assume that the company will prepare a budgeted balance sheet as of September 30. Compute the accounts receivable as of that date. (Do not round intermediate calculations. Omit the "$" sign in your response.)

Total accounts receivable

$

The balance sheet of Phototec, Inc., a distributor of photographic supplies, as of May 31 is given below:

Phototec, Inc. Balance Sheet May 31
Assets
Cash	$	10,800
Accounts receivable		72,000
Inventory		36,000
Buildings and equipment, net of depreciation		601,200
Total assets	$	720,000
Liabilities and Stockholders' Equity
Accounts payable	$	86,400
Note payable		15,840
Capital stock		531,360
Retained earnings		86,400
Total liabilities and stockholders' equity	$	720,000

The company is in the process of preparing a budget for June and has assembled the following data:

a.	Sales are budgeted at $271,000 for June. Of these sales, $70,000 will be for cash; the remainder will be credit sales. One-half of a months credit sales are collected in the month the sales are made, and the remainder is collected the following month. All of the May 31 accounts receivable will be collected in June.
b.	Purchases of inventory are expected to total $196,000 during June. These purchases will all be on account. Forty percent of all inventory purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the May 31 accounts payable to suppliers will be paid during June.
c.	The June 30 inventory balance is budgeted at $34,000.
d.	Selling and administrative expenses for June are budgeted at $31,000, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $4,000 for the month.
e.	The note payable on the May 31 balance sheet will be paid during June. The companys interest expense for June (on all borrowing) will be $600, which will be paid in cash.
f.	New warehouse equipment costing $9,000 will be purchased for cash during June.
g.	During June, the company will borrow $23,000 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:
1a.	Prepare schedule of expected cash collections from sales and a schedule of expected cash disbursements for inventory purchases. (Omit the "$" sign in your response.)

Schedule of Expected Cash Collections
Cash sales-June	$
Collections on accounts receivable:
May 31 balance
June
Total cash receipts	$

Schedule of Expected Cash Disbursements
May 31 accounts payable balance	$
June purchases
Total cash payments	$

1b.	Prepare a cash budget for June. (Input all amounts as positive values except cash deficiency, repayments and interest which should be indicated by a minus sign. Omit the "$" sign in your response.)

Phototec, Inc. Cash Budget For the Month of June
Cash balance, beginning	$
Add receipts from customers
Total cash available
Less disbursements:
Purchase of inventory
Selling and administrative expenses
Purchases of equipment
Total cash disbursements
Excess of receipts over disbursements
Financing:
Borrowings-note
Repayments-note
Interest
Total financing
Cash balance, ending	$

2.	Prepare a budgeted income statement for June. (Input all amounts as positive values. Omit the "$" sign in your response.)

Phototec, Inc. Budgeted Income Statement For the Month of June
(Click to select)Cost of goods soldSalesEnding inventoryBeginning inventoryPurchases		$
Cost of goods sold:
(Click to select)Beginning inventoryEnding inventoryCost of goods soldSalesInterest expense	$
(Click to select)Cost of goods soldPurchasesInterest expenseSalesEnding inventory
(Click to select)Goods available for salePurchasesCost of goods soldBeginning inventoryEnding inventory
(Click to select)Ending inventoryBeginning inventoryCost of goods soldPurchasesGoods available for sale
(Click to select)Interest expenseCost of goods soldPurchasesBeginning inventoryEnding inventory
(Click to select)Ending inventoryNet income (loss)Gross marginBeginning inventoryNet operating income (loss)
(Click to select)SalesEnding inventoryInterest expenseCost of goods soldSelling and administrative expenses
(Click to select)Ending inventoryGross marginNet operating income (loss)Net income (loss)Purchases
(Click to select)Beginning inventoryEnding inventoryPurchasesCost of goods soldInterest expense
(Click to select)Gross marginEnding inventoryNet operating income (loss)Net income (loss)Beginning inventory		$

3.	Prepare a budgeted balance sheet as of June 30. (Be sure to list the assets and liabilities in order of their liquidity. Omit the "$" sign in your response.)

Phototec, Inc. Budgeted Balance Sheet June 30
Assets
(Click to select)Note payable,Inventory,Cash,Capital stock,Accounts payable	$
(Click to select)Retained earningsCapital stockAccounts receivableNote payableBuildings and equipment, net of depreciation
(Click to select)InventoryRetained earningsCapital stockCashAccounts receivable
(Click to select)Buildings and equipment, net of depreciationNote payableAccounts receivableCapital stockRetained earnings
Total assets	$
Liabilities and Stockholders' Equity
(Click to select)Accounts receivableInventoryCapital stockNote payableAccounts payable	$
(Click to select)Retained earningsCashInventoryNote payableAccounts receivable
(Click to select)Retained earningsCapital stockAccounts receivableInventoryBuildings and equipment, net of depreciation
(Click to select)CashRetained earningsAccounts payableInventoryAccounts receivable
Total liabilities and equity	$

Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires three small chips that cost $9 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3, as shown below:

	Year 2					Year 3
	First	Second	Third	Fourth		First
Budgeted production, in calculators	59,000	89,000	157,000	95,000		74,000

The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a quarter must equal 15% of the following quarters production needs. A total of 26,550 chips will be on hand to start the first quarter of Year 2.

Required:

Prepare a direct materials budget for chips, by quarter and in total, for Year 2. (Do not round intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.)

Micro Products, Inc. Direct Materials Budget - Year 2
	Quarter
	First	Second	Third	Fourth	Year
Production needschips
(Click to select)AddDeduct: (Click to select)Beginning inventoryEnding inventory
Total needs
(Click to select)DeductAdd: (Click to select)Ending inventoryBeginning inventory
Required purchaseschips
Total cost of purchases	$	$	$	$	$

References

eBook & Resources

Crystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:

	Sales in Units
July		29,000
August		42,000
September		56,000
October		51,000

The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month finished goods inventories must equal 10% of the next months sales. The inventory at the end of June was 2,900 units.

Required:

Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total. (Do not round intermediate calculations. Input all amounts as positive values.)

Crystal Telecom Production Budget
	July	August	September	Quarter
Budgeted sales in units
(Click to select)AddDeduct: (Click to select)Beginning inventoryEnding inventory
Total needs
(Click to select)AddDeduct: (Click to select)Beginning inventoryEnding inventory
Required production in units