July August 3 $ 60,000 86,4004 $ 57,6005 99.9006 Schedule for Collections of Accounts Receivable (Cash inflows) ollections of accounts receivable: June April sales.......... $ 48,0001 2 May sales.. 90,000 June sales.. July sales... Total... $138.000 1 $120,000 x 40% = $48,000 $150,000 x 60% = $90,000 3 $150,000 x 40% = $60,000 $160,000 ~ 90% x 60% = $86,400 $160,000 ~ 90% x 40% = $57,600 $185,000 * 90% 60% = $99,900 $146.400 $157.500 2 4 6 July August yCash Payments(Outflows) for manufacturing costs: June b Payment of accounts payable, Pbeginning of month balanc $13,000 Payment of current month's cost 43,200 e $10,800 56,000 $14,000 74,400 Total.. $56.200 $66.800 $88.400 Accounts payable, June 1 balance = $13,000 ($66,000 - $12,000) x 20% = $10,800 ($82,000 - $12,000) 20%= 14,000 ($66,000 - $12,000) * 80% = 43,200 ($82,000 - $12,000) x 80% = $56,000 ($105,000 - $12,000) x 80% = $74,400 d Question 1 (5 points) P3B: Net income is budgeted to be $ Question 2 (5 points) P4B: Cash receipts from collection of accounts receivable budgeted for August equal $ Question 3 (5 points) P4B: Total cash payments budgeted for August equal $ Question 4 (5 points) P3B: Total cost of goods sold budgeted for March is $ Question 5 (5 points) P3B: The total pounds of plastic that need to be purchased for March is and the total pounds of foam lining that need to be purchased is estion 6 (5 points) P3B: Total cost of finished goods manufactured budgeted for March is $ Question 7 (5 points) P3B: Total gross profit is budgeted for March to be $ Question 8 (5 points) P4B: Cash balance at the end of July is budgeted to be $ Question 9 (5 points) P4B: Cash payments for manufacturing costs budgeted for June equal $ Question 10 (5 points) P3B: Total batting helmets to be produced in March is and total football helmets to be produced is Question 11 (5 points) P4B: The cash budget reveals that the company will meet or exceed its minimum cash balance goal at the end of each month in this budget period. True False Question 12 (5 points) P4B: Cash receipts from cash sales budgeted for July equal $ Question 13 (5 points) P3B: Total selling expenses are budgeted for $ Question 14 (5 points) P3B: Total direct labor cost in the molding department is budgeted for $ Ouestion 1515 nainte Question 15 (5 points) P4B: Total cash receipts budgeted for June equal $ Question 16 (5 points) P4B: Cash balance at the end of August is budgeted to be $ Question 17 (5 points) P3B: Total direct labor cost budgeted for the assembly department is $ Question 18 (5 points) P4B: Cash payments for selling and administrative expenses budgeted for July equal $ Question 19 (5 points) P3B: The total revenue from sales is budgeted at $ Question 20 (5 points) P4B: Cash balance at the end of June is budgeted to be $ PR 21-3B Budgeted income statement and supporting budgets Obj. 4 The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for March: EXCEL TEMPLATE A. Estimated sales for March: Batting helmet.... Football helmet 1,200 units at $40 per unit 6,500 units at $160 per unit B. Estimated inventories at March 1: Direct materials: Plastic. Foam lining. 90 lbs. 80 lbs. Finished products: Batting helmet....... Football helmet .... + 40 units at $25 per unit 240 units at $77 per unit C. Desired inventories at March 31: Direct materials: Plastic Foam lining.. 50 lbs. 65 lbs. Finished products: Batting helmet..... Football helmet .... 50 units at $25 per unit 220 units at $78 per unit D. Direct materials used in production: D. Direct materials used in production: 1.2 lbs. per unit of product 0.5 lb. per unit of product In manufacture of batting helmet: Plastic Foam lining.. In manufacture of football helmet: Plastic.. Foam lining 3.5 lbs. per unit of product 1.5 lbs. per unit of product E. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic Foam lining. $6 per lb. $4 per lb. F. Direct labor requirements: 0.2 hr. at $20 per hr. 0.5 hr. at $14 per hr. Batting helmet: Molding Department. Assembly Department.. Football helmet: Molding Department. Assembly Department.. 0.5 hr. at $20 per hr. 1.8 hrs. at $14 per hr. G. Estimated factory overhead costs for March: Indirect factory wages Depreciation of plant and $86,000 12,000 Power and light Insurance and property tax $4,000 2,300 Avinmont H. Estimated operating expenses for March: $184,300 87,200 32,400 3,800 Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Telephone expense-selling Telephone expense-administrative Travel expense-selling Office supplies expense Miscellaneous administrative expense 5,800 1,200 9,000 1,100 1,000 I. Estimated other income and expense for March: Interest revenue $940 872 Interest expense J. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March. 4. Prepare a direct labor cost budget for March. 5. Prepare a factory overhead cost budget for March. 6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be $15,300, and work in process at the end of March is desired to be $14,800. 7. Prepare a selling and administrative expenses budget for March. 8. Prepare a budgeted income statement for March. Obj. 5 The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: SHOW ME HOW W EXCEL TEMPLATE August Sales Manufacturing costs. Selling and administrative expenses Capital expenditures June $160,000 66,000 40,000 July $185,000 82,000 46,000 $200,000 105,000 51,000 120,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent $12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of $42,000, marketable securities of $25,000, and accounts receivable of $198,000 ($150,000 from May sales and $48,000 from April sales). Sales on account in April and May were $120,000 and $150,000, respectively. Current liabilities as of June 1 include $13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $24,000 will be made in July. Mercury Shoes' regular quarterly dividend of $15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of $40,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for June, July, and August. Answer 2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller? July August 3 $ 60,000 86,4004 $ 57,6005 99.9006 Schedule for Collections of Accounts Receivable (Cash inflows) ollections of accounts receivable: June April sales.......... $ 48,0001 2 May sales.. 90,000 June sales.. July sales... Total... $138.000 1 $120,000 x 40% = $48,000 $150,000 x 60% = $90,000 3 $150,000 x 40% = $60,000 $160,000 ~ 90% x 60% = $86,400 $160,000 ~ 90% x 40% = $57,600 $185,000 * 90% 60% = $99,900 $146.400 $157.500 2 4 6 July August yCash Payments(Outflows) for manufacturing costs: June b Payment of accounts payable, Pbeginning of month balanc $13,000 Payment of current month's cost 43,200 e $10,800 56,000 $14,000 74,400 Total.. $56.200 $66.800 $88.400 Accounts payable, June 1 balance = $13,000 ($66,000 - $12,000) x 20% = $10,800 ($82,000 - $12,000) 20%= 14,000 ($66,000 - $12,000) * 80% = 43,200 ($82,000 - $12,000) x 80% = $56,000 ($105,000 - $12,000) x 80% = $74,400 d Question 1 (5 points) P3B: Net income is budgeted to be $ Question 2 (5 points) P4B: Cash receipts from collection of accounts receivable budgeted for August equal $ Question 3 (5 points) P4B: Total cash payments budgeted for August equal $ Question 4 (5 points) P3B: Total cost of goods sold budgeted for March is $ Question 5 (5 points) P3B: The total pounds of plastic that need to be purchased for March is and the total pounds of foam lining that need to be purchased is estion 6 (5 points) P3B: Total cost of finished goods manufactured budgeted for March is $ Question 7 (5 points) P3B: Total gross profit is budgeted for March to be $ Question 8 (5 points) P4B: Cash balance at the end of July is budgeted to be $ Question 9 (5 points) P4B: Cash payments for manufacturing costs budgeted for June equal $ Question 10 (5 points) P3B: Total batting helmets to be produced in March is and total football helmets to be produced is Question 11 (5 points) P4B: The cash budget reveals that the company will meet or exceed its minimum cash balance goal at the end of each month in this budget period. True False Question 12 (5 points) P4B: Cash receipts from cash sales budgeted for July equal $ Question 13 (5 points) P3B: Total selling expenses are budgeted for $ Question 14 (5 points) P3B: Total direct labor cost in the molding department is budgeted for $ Ouestion 1515 nainte Question 15 (5 points) P4B: Total cash receipts budgeted for June equal $ Question 16 (5 points) P4B: Cash balance at the end of August is budgeted to be $ Question 17 (5 points) P3B: Total direct labor cost budgeted for the assembly department is $ Question 18 (5 points) P4B: Cash payments for selling and administrative expenses budgeted for July equal $ Question 19 (5 points) P3B: The total revenue from sales is budgeted at $ Question 20 (5 points) P4B: Cash balance at the end of June is budgeted to be $ PR 21-3B Budgeted income statement and supporting budgets Obj. 4 The budget director of Gold Medal Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for March: EXCEL TEMPLATE A. Estimated sales for March: Batting helmet.... Football helmet 1,200 units at $40 per unit 6,500 units at $160 per unit B. Estimated inventories at March 1: Direct materials: Plastic. Foam lining. 90 lbs. 80 lbs. Finished products: Batting helmet....... Football helmet .... + 40 units at $25 per unit 240 units at $77 per unit C. Desired inventories at March 31: Direct materials: Plastic Foam lining.. 50 lbs. 65 lbs. Finished products: Batting helmet..... Football helmet .... 50 units at $25 per unit 220 units at $78 per unit D. Direct materials used in production: D. Direct materials used in production: 1.2 lbs. per unit of product 0.5 lb. per unit of product In manufacture of batting helmet: Plastic Foam lining.. In manufacture of football helmet: Plastic.. Foam lining 3.5 lbs. per unit of product 1.5 lbs. per unit of product E. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic Foam lining. $6 per lb. $4 per lb. F. Direct labor requirements: 0.2 hr. at $20 per hr. 0.5 hr. at $14 per hr. Batting helmet: Molding Department. Assembly Department.. Football helmet: Molding Department. Assembly Department.. 0.5 hr. at $20 per hr. 1.8 hrs. at $14 per hr. G. Estimated factory overhead costs for March: Indirect factory wages Depreciation of plant and $86,000 12,000 Power and light Insurance and property tax $4,000 2,300 Avinmont H. Estimated operating expenses for March: $184,300 87,200 32,400 3,800 Sales salaries expense Advertising expense Office salaries expense Depreciation expense-office equipment Telephone expense-selling Telephone expense-administrative Travel expense-selling Office supplies expense Miscellaneous administrative expense 5,800 1,200 9,000 1,100 1,000 I. Estimated other income and expense for March: Interest revenue $940 872 Interest expense J. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March. 4. Prepare a direct labor cost budget for March. 5. Prepare a factory overhead cost budget for March. 6. Prepare a cost of goods sold budget for March. Work in process at the beginning of March is estimated to be $15,300, and work in process at the end of March is desired to be $14,800. 7. Prepare a selling and administrative expenses budget for March. 8. Prepare a budgeted income statement for March. Obj. 5 The controller of Mercury Shoes Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: SHOW ME HOW W EXCEL TEMPLATE August Sales Manufacturing costs. Selling and administrative expenses Capital expenditures June $160,000 66,000 40,000 July $185,000 82,000 46,000 $200,000 105,000 51,000 120,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the sale and the remainder the following month (second month after sale). Depreciation, insurance, and property tax expense represent $12,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in February, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of June 1 include cash of $42,000, marketable securities of $25,000, and accounts receivable of $198,000 ($150,000 from May sales and $48,000 from April sales). Sales on account in April and May were $120,000 and $150,000, respectively. Current liabilities as of June 1 include $13,000 of accounts payable incurred in May for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $24,000 will be made in July. Mercury Shoes' regular quarterly dividend of $15,000 is expected to be declared in July and paid in August. Management desires to maintain a minimum cash balance of $40,000. Instructions 1. Prepare a monthly cash budget and supporting schedules for June, July, and August. Answer 2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller