Homework 7 instructions help The following information applies to the questions displayed below Aztec Company sells its product for $180 per unit Its actual and projected sales follow Units Dollars April (actual) 3,500 $630,000 May (actual) 3,800 684,000 June (budgeted) 7,500 1,350,000 July (budgeted) 7,000 1,260,000 August (budgeted) 3,600 648,000 All sales are on credit Recent experience shows that 28 of credit sales is collected in the month of the sale, 42 in the month after the sale, 25 in the second month after the sale, and 5 proves to be uncollectible The products purchase price is $110 per unit All purchases are payable within 12 days Thus, 60 of purchases made in a month is paid in that month and the other 40 is paid in the next month The company has a policy to maintain an ending monthly inventory of 24 of the next months unit sales plus a safety stock of 135 units The April 30 and May 31 actual inventory levels are consistent with this policy Selling and administrative expenses for the year are $1,224,000 and are paid evenly throughout the year in cash The companys minimum cash balance at month end is $150,000 This minimum is maintained, if necessary, by borrowing cash from the bank If the balance exceeds $150,000, the company repays as much of the loan as it can without going below the minimum This type of loan carries an annual 12 interest rate On May 31, the loan balance is $40,500, and the companys cash balance is $150,000 (Round final answers to the nearest whole dollar ) rev 11 19 2013 QC 40413, 10 21 2014 QC 56990 1 value 2 30 points Required information Required 1 Prepare a table that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Difficulty HardLearning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Check my work 2 value 2 30 points Required information 2 Prepare a table that shows the computation of budgeted ending inventories (in units) for April, May, June, and July References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Difficulty HardLearning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Check my work 3 value 2 30 points Required information 3 Prepare the merchandise purchases budget for May, June, and July Report calculations in units and then show the dollar amount of purchases for each month References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Difficulty HardLearning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Check my work 4 value 2 30 points Required information 4 Prepare a table showing the computation of cash payments on product purchases for June and July References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Difficulty HardLearning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Check my work 5 value 2 30 points Required information 5 Prepare a cash budget for June and July, including any loan activity and interest expense Compute the loan balance at the end of each month (Do not round intermediate calculations ) rev 11 19 2013 QC 40413 References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Difficulty HardLearning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Check my work 2015 McGraw Hill Education All rights reserved Homework 7 instructions help The following information applies to the questions displayed below Near the end of 2013, the management of Dimsdale Sports Co , a merchandising company, prepared the following estimated balance sheet for December 31, 2013 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2013 Assets Cash $ 35,500 Accounts receivable 520,000 Inventory 157,500 Total current assets 713,000 Equipment $ 538,000 Less accumulated depreciation 67,250 Equipment, net 470,750 Total assets $ 1,183,750 Liabilities and Equity Accounts payable $ 380,000 Bank loan payable 15,000 Taxes payable (due 3 15 2014) 91,000 Total liabilities $ 486,000 Common stock 474,500 Retained earnings 223,250 Total stockholders equity 697,750 Total liabilities and equity $ 1,183,750 To prepare a master budget for January, February, and March of 2014, management gathers the following information a Dimsdale Sports single product is purchased for $30 per unit and resold for $55 per unit The expected inventory level of 5,250 units on December 31, 2013, is more than managements desired level for 2014, which is 20 of the next months expected sales (in units) Expected sales are January, 6,750 units February, 9,100 units March, 10,500 units and April, 9,500 units b Cash sales and credit sales represent 20 and 80 , respectively, of total sales Of the credit sales, 59 is collected in the first month after the month of sale and 41 in the second month after the month of sale For the December 31, 2013, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 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, 2013, accounts payable balance, $70,000 is paid in January and the remaining $310,000 is paid in February d Sales commissions equal to 20 of sales are paid each month Sales salaries (excluding commissions) are $84,000 per year e General and administrative salaries are $144,000 per year Maintenance expense equals $1,900 per month and is paid in cash f Equipment reported in the December 31, 2013, balance sheet was purchased in January 2013 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, $38,000 February, $98,000 and March, $28,500 This equipment will be depreciated under the straight line method over eight years with no salvage value A full months 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 $170,000, which will be paid with cash on the last day of the month h Dimsdale 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 $21,450 in each month i The income tax rate for the company is 41 Income taxes on the first quarters income will not be paid until April 15 Required Prepare a master budget for each of the first three months of 2014 include the following component budgets rev 04 30 2014 QC 49073, 07 19 2014 QC 51562, 05 19 2015 QC CS 16007 6 value 2 30 points Required information 1 Monthly sales budgets References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 7 value 2 30 points Required information 2 Monthly merchandise purchases budgets References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 8 value 2 30 points Required information 3 Monthly selling expense budgets References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 9 value 2 30 points Required information 4 Monthly general and administrative expense budgets rev 04 30 2014 QC 49073, 05 19 2015 QC CS 16007 References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 10 value 2 30 points Required information 5 Monthly capital expenditures budgets References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 11 value 2 30 points Required information 6 Monthly cash budgets rev 01 20 2014 QC 43790, 12 09 2014 QC CS 418, 12 18 2014 QC CS 418, 04 20 2015 QC CS 14051 References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 12 value 2 30 points Required information 7 Budgeted income statement for the entire first quarter (not for each month) rev 07 19 2014 QC 51562, 03 19 2015 QC CS 10782, 05 19 2015 QC CS 16007 References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 13 value 2 40 points Required information 8 Budgeted balance sheet as of March 31, 2014 References eBook Resources Expanded tableLearning Objective 22 C2 Describe a master budget and the process of preparing it Learning Objective 22 P2 Link both operating and capital expenditures budgets to budgeted financial statements Difficulty HardLearning Objective 22 P1 Prepare each component of a master budget and link each to the budgeting process Check my work 2015 McGraw Hill Education All rights reserved Requires a modern browser e g Safari 1, Netscape 6 or IE 5 Requires a modern browser e g Safari 1, Netscape 6 or IE 5

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 13, 2024

Homework 7 instructions | help [The following information applies to the questions displayed below.] Aztec Company sells its product for $180 per unit. Its actual

Homework 7

instructions | help

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

Aztec Company sells its product for $180 per unit. Its actual and projected sales follow.

	Units	Dollars
April (actual)	3,500	$630,000
May (actual)	3,800	684,000
June (budgeted)	7,500	1,350,000
July (budgeted)	7,000	1,260,000
August (budgeted)	3,600	648,000

All sales are on credit. Recent experience shows that 28% of credit sales is collected in the month of the sale, 42% in the month after the sale, 25% in the second month after the sale, and 5% proves to be uncollectible. The products purchase price is $110 per unit. All purchases are payable within 12 days. Thus, 60% of purchases made in a month is paid in that month and the other 40% is paid in the next month. The company has a policy to maintain an ending monthly inventory of 24% of the next months unit sales plus a safety stock of 135 units. The April 30 and May 31 actual inventory levels are consistent with this policy. Selling and administrative expenses for the year are $1,224,000 and are paid evenly throughout the year in cash. The companys minimum cash balance at month-end is $150,000. This minimum is maintained, if necessary, by borrowing cash from the bank. If the balance exceeds $150,000, the company repays as much of the loan as it can without going below the minimum. This type of loan carries an annual 12% interest rate. On May 31, the loan balance is $40,500, and the companys cash balance is $150,000. (Round final answers to the nearest whole dollar.)

rev: 11_19_2013_QC_40413, 10_21_2014_QC_56990

1. value: 2.30 points Required information

Required:
1.	Prepare a table that shows the computation of cash collections of its credit sales (accounts receivable) in each of the months of June and July.

References eBook & Resources Expanded tableLearning Objective: 22-C2 Describe a master budget and the process of preparing it. Difficulty: HardLearning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements.Check my work 2. value: 2.30 points Required information

2.	Prepare a table that shows the computation of budgeted ending inventories (in units) for April, May, June, and July.

3.	Prepare the merchandise purchases budget for May, June, and July. Report calculations in units and then show the dollar amount of purchases for each month.

4.	Prepare a table showing the computation of cash payments on product purchases for June and July.

5.	Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month. (Do not round intermediate calculations.)

rev: 11_19_2013_QC_40413

Homework 7

instructions | help

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

Near the end of 2013, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2013.

DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2013
Assets
Cash	$	35,500
Accounts receivable		520,000
Inventory		157,500

Total current assets				713,000
Equipment	$	538,000
Less accumulated depreciation		67,250

Equipment, net				470,750

Total assets			$	1,183,750

Liabilities and Equity
Accounts payable	$	380,000
Bank loan payable		15,000
Taxes payable (due 3/15/2014)		91,000

Total liabilities			$	486,000
Common stock		474,500
Retained earnings		223,250

Total stockholders equity				697,750

Total liabilities and equity			$	1,183,750

To prepare a master budget for January, February, and March of 2014, management gathers the following information.

a.	Dimsdale Sports single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 5,250 units on December 31, 2013, is more than managements desired level for 2014, which is 20% of the next months expected sales (in units). Expected sales are: January, 6,750 units; February, 9,100 units; March, 10,500 units; and April, 9,500 units.
b.	Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 59% is collected in the first month after the month of sale and 41% in the second month after the month of sale. For the December 31, 2013, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 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, 2013, accounts payable balance, $70,000 is paid in January and the remaining $310,000 is paid in February.
d.	Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $84,000 per year.
e.	General and administrative salaries are $144,000 per year. Maintenance expense equals $1,900 per month and is paid in cash.
f.	Equipment reported in the December 31, 2013, balance sheet was purchased in January 2013. 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, $38,000; February, $98,000; and March, $28,500. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full months 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 $170,000, which will be paid with cash on the last day of the month.
h.	Dimsdale 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 $21,450 in each month.
i.	The income tax rate for the company is 41%. Income taxes on the first quarters income will not be paid until April 15.

Required:

Prepare a master budget for each of the first three months of 2014; include the following component budgets:

rev: 04_30_2014_QC_49073, 07_19_2014_QC_51562, 05_19_2015_QC_CS-16007

6. value: 2.30 points Required information

1.	Monthly sales budgets.

References eBook & Resources Expanded tableLearning Objective: 22-C2 Describe a master budget and the process of preparing it.Learning Objective: 22-P2 Link both operating and capital expenditures budgets to budgeted financial statements. Difficulty: HardLearning Objective: 22-P1 Prepare each component of a master budget and link each to the budgeting process.Check my work 7. value: 2.30 points Required information

2.	Monthly merchandise purchases budgets.

3.	Monthly selling expense budgets.

4.	Monthly general and administrative expense budgets.

rev: 04_30_2014_QC_49073, 05_19_2015_QC_CS-16007

5.	Monthly capital expenditures budgets.

6.	Monthly cash budgets.

rev: 01_20_2014_QC_43790, 12_09_2014_QC_CS-418, 12_18_2014_QC_CS-418, 04_20_2015_QC_CS-14051

7.	Budgeted income statement for the entire first quarter (not for each month).

rev: 07_19_2014_QC_51562, 03_19_2015_QC_CS-10782, 05_19_2015_QC_CS-16007

8.	Budgeted balance sheet as of March 31, 2014.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

5th edition

★★★★★

3. What is meant when we say that people with a Protestant character exhibit manipulative behaviour?

Answered: 1 week ago

Previous Question Next Question