M N 0 Kandon Companyar altres decorative rocks for wa km Kandon is preparing the budget for the quaranded Ane 30. She has gathered the folowing Woman 11 Klandon's manager ported that the company cold 12.000 bage of rocka in March Ho han dewloped the folowing sales forecaut. The expected sales price 510 per bag Apd 20,000 bage May 50.000 bage 30,000 bage July 25.000 bags August 15.000 bags 2. Sabe personnel receive a 8 percent common on every bag of rock sold. The flowing money fred seating and administrative expenses are planned for the quarter. However, there amounts do not include the depreciation Intan mutine from the budget euiment urchase incat 71 My Fed Selling and Administrative Variable Depreciation $10,000 Sales of sales pero 25.000 50.50 Advertising 1.000 Management des 10,000 Miscellaneous Bad det 0.50 Tatalos 140.500 $1.00 18 19 30 100 20 27 3. The standard laboralowed for one bag of pols 15 minutes. The current dret aborrate is $10 per hour 4. After experiencing difficulty in supplying customer na my fashion due to inventory shortages, the company established a policy maquing the ending finished goodo inventory to equn 20 percent of the following mony's budgeted sales, nunts On March 31. 4,000 bags were on hand & Fue pounds of raw materias e muired to ach bag of finished rocks. The company wants to have a materials on hand at the end of each month equal to 10 percent of the following monty's production needs On March 31, 13.000 pounds of materials were on hand The materiale din production 30 40 per pound. Har of the month's purchases is paid for the month of purchase the other her, the following month. No count valable 7 On June 1, the company plans to spend 546.000 to upgrades seguipment that is fully depreciated. The newegent is expected to have a ve year, with no sul value The bungeed monthly variable and totale overhead are as folows. Variable overhead is based on the number of units produced. The fed overhead budget is based on an annual production of 400.000 Faed Mon Overhead Variable Costa Depreciation $8.000 Indirect maison 1.000 30.05 Indirect labor 10.000 0.20 Us 20.000 0.10 Property taxes 5,000 Malinance 6.000 0415 Total costs 30.000 10.50 BARRA 29 Al sales are made on account Hintononly, the company has colected 70 percent of ts sales in the month of sale and 25 percent in the following the sale. The remaining 5 percent of sales uncolectible 10. Klandos maintain a minimum cam balance of 530,000. An open te ofre at a local bank alows the company to bomow up to $175.000 per quarter in $1,000 increments 11. Alborowings done at the beginning of the month and all payments are made at the end of a month in $1,000 increments Acued forest is paid only when prindpal smpaid. The interest ate is 12 percent per year 12 Aquartery dividend of $40,000 will be declared and paid in April 43. Income taxes payable for the first quarter we be passen A15 Kangon's tax rate is 30 percent 14 The March 31 balance sheet is as follows 45 Cash Accounts receivable Poods Ba materials anter 140,000 30,000 26.000 5.200 200,000 150.000) 5251200 Accumulated Depreciation Total assets income taxes pay Common ock Ratained Samingo $12,000 80.000 52.000 Case 5 1107 Xfx 0.1*G106 E H 3 L 50 Cash Accounts receivable Fisished goods inventory Raw materials inventory Piant & equipment Accumulated Depreciation Total assets March 21 $40,000 30,000 28.000 5.200 200,000 150.000) 5251,200 33 36 57 Accounts payable Income taxes payabile Common stock Retained 3amings Total Imbities and equities $12,000 50.000 $2,000 137200 5251200 31 Required 55 06 IT a Prepare all components of Klandon's master budget for the second quarter Use the template's provided below to prepare the budgets and pro-forme statements 00 71 72 73 74 75 Sales Budget May April 20 000 Budgeted units sold Budgeted sales price Budgeted sales revenue 5 $ 50.000 10 500.000 Quarter 100.000 1D 1.000.000 5 5 Pune 30.000 10 300.000 200.000 $ 5 $ $ 77 7 79 DD 01 May Quader M 85 Orsolve your own way and solve the rest of the problem Salling Administrative Expont Budget And Depreciation Sales personnel compensation Advertising Management salaries Miscellaneous Bad debts 10 000 Total budgeted expenses $ 10,000 Less non-chepen Depreciation 5 Bad date 10 000 Total cash coses 5 $ 25,000 25.000 s 15.000 15.000 50.000 50.000 DO s 5 $ 25.000 15 000 50.000 $ 5 3 D Production Budget BE NA 30,000 Quarter 100.000 Budgeted unt sales - Budgeted ending inventory = Total units required Beginning inventory - Budgeted production 20,000 10.000 30,000 50.000 5.000 56,000 10,000 46,000 100,000 30,000 6.000 24,000 30.000 100.000 100 131 Material Parchase Bude April 30,000 45.000 24.000 100,000 104 105 100 SOT Budgeted production Standard poundunt - Production needs - Budgeted ending inventory - Total pounds required Beginning inventory tah Case 5 + E107 oxfx 0.106106 A 0 E a H K M N Malene Buchar Budget Aort 30,000 Max 46,000 24.000 Quader 100.000 07 Budgeted production Standard pound un Production needs Budgeted ending Inventory Total poundemquired Beginning inventory Budgeted purchases x Standard price/pound - Budgeted purchases cost 10 110 111 112 113 114 Direct Labor Budget 18 April 30,000 May 40,000 24,000 100,000 THB 110 Budgeted production x Standard DLH Total direct labor has nuired Standard wage rate Budgeted direct labor cost Manufactung Omnd. Budal Art 30,000 Max. 46,000 une 24.000 Quarter 100,000 122 12 124 120 126 127 120 Budgeted production Variable OHunit Total variable overhead Fored overhead Total budgeted Manufacturing OH Low Non-cashem Depreciation = Total cash costs 130 13 154 135 136 Erding Inventory and Contact Good. So Budget Rew Materials Beghning Balance Purchases of aw materials Leon: Ending tawy materials inventory Raw materials used 130 5 13 140 + 12 Rashed Goods coste Drect mattis Direct labor Overhead Total standard unit coul Ending inventory units Ending finished goods hventory 5 es 3 14 140 1 101 $ 194 Cont of Goods Sold Beginning work in process inventory Direct mattis used Direct latior Manufacturing overhead Total manufacturing out Len: Ending work in process inventory Coul of goods manufactured Add: Beginning finished goods inventory Less Ending finished goods inventory Cont of goods sold 3 $ 107 150 150 101 Cath Recen Budget ADAI Mary June Total Cash Recipes Bad Debt Accounts Receivable Former 000 Formatting as Table 5107 xfx 0,1G106 G H N 0 Cash Ret Buda! A May Total Cash Receta Kad Debts Accounts Receivable 160 10 TO Marsh sales $120.000 Aprilia 1200.000 RON 1200.000 25 1200.000 May sa 5100, 350.000 1000.000 June sales 3309.000 1300,000 25% 3300,000 x Total 174 172 Cash Payment for Male Duda 100 Art May June Total Cash Payment Accounts Payable 13 164 AP from March Apa purchases 3.000 so 356.000 May purchases 1.600 x 50 SAO X SON June purchased 150.00 168000 Total 100 ret S A ME Quarter TO 10 w 200 201 200 + Beginning conce Collections from a Totalt arvatable Les dibune Mala putthass Dret labor Manufacturing overhead Seling & admirative expense Inoon tas Equipment purchase Dividende Total cash burments Cathewens een Mi cash balance Cash excess deficiency Franeng Borowings Repayment Internal Total Tinanong Ergan i ti 200 20 TE Preparato come alement for the second quarter So Cost of sod E107 fe0.1'6106 AD H M 000 200 Totathalle Lote dhurament Mataas purchases Otwee Manufacturing over and Being & admite expense Income taxes Equipment purchase Dividends Total cash disbursements Cash on deficiency Mrimum cash balance Cash oficer Feances Homwings Repayments Inaest Total financing Ending cash balance 200 210 214 215 217 Prepara profom. Income statement for the second quarter 310 22 224 Solve Sales Cost of goods Group Selling & admite expense Operating Interesteente Income before the Income tax expense 30%) Net income 224 5 230 20 . Prepare a profona bence sheet as of June 30 Salve 23 3 212 AR Finished Goods Raw Material inventory Property. P& Equent Les Acued Depreciation Total Amets 200 14 NIE Income To Pay Nota Payat Common Book Retare ting Total Latest Selling & Administrative Budget; total cash costs for the quarter = $159,500 Production Budget; Total budgeted production (units) for June = 29,000 Materials Purchase Budget; Total budgeted purchases cost for the quarter = $201.400 Manufacturing Overhead Budget: total budgeted MOH for May = $73,000 Finished Goods; ending finished goods inventory 32,500 Cost of Goods Sold; total manufacturing costs = $655,000 Cash Receipts budget; total cash receipts for the quarter = $905,000 Cash Budget; Ending cash balance at June 30th = $30,560 Proforma Income Stmt; Net income = $75,782 Proforma Balance Sheet; Total Assets = $285,860 A D Case 5: Comprehensive master budget in a manufacturing sering Name: Instructor Course Date: Klandon Company manufactures decorative rocks for aquarume Kim Kardon la preparing the budget for the quarter ended June 30. She has gathered the following information 10 11 14 15 16 1 Kundon's sales manager reported that the company sold 12.000 bags of rockan Maich. He has developed the folowing sales forecast The expected sale price is $10 per bag April 20,000 bago May 50.000 bagi Jane 30.000 bags July 25,000 bags August 15.000 bago 2. Sala personnel receive a 6 percent common on every bag of rocks sold. The folowng monthly fred sling and administrative expenses are planned for the quarter. However, there amounts do not include the decreciation Increase resulting from the butted out ourchase in June ( 1 Monthy Fred Seling and Administrative CA Variable Costine Depreciation $10,000 Salaries of sales personnel 25.000 50 50 Advog 1,000 Management catanes 10,000 Moolaneous 500 Bad Gets 0.50 Totalcos 346.800 17 18 20 21 22 23 24 25 25 21 31 30.05 3. The standard labor allowed for one bag of rocks 15 ms. The current direct laborate is $10 per hour 4. Aterperincing difficulty in supplying customers namely fashion due to story shortages, the compostablished a policy requiring the ending the goods inventory to equal 20 percent of the folowing month's budgeted le. In units. On March 31, 4.000 bags were on hand five pounds of small around to reach bag of finished pocks The company wants to have now me on hand at the end of each month equal to 10 perdent of the following m's production needs. On March 31, 13,000 pounds of materials were on hand The www materiah wed in production coul 60 40 per pound. Har of the month's purchases is paid for in the month of purchase the other hat in the following month. No discount is available On June 1, the company plans to end 548,000 to upgrade satte equipment is deprecated. The new equipment is expected to have a five your owth no residente 6. The budgeted month variable and to ed overhead an as follows. Variable overhead is based on the number of units produced. The fred overhead budget is based on an annual broduction of 400.000 bao Fred Month Overhead Varow Depreciation 38.000 Inom 1.000 Indret bor 10.000 020 20.000 010 Property 5,000 Maintenance 0.000 000 Toulous 380.000 10.50 9. All sales are made on count. Hotocaly, the company has collected 70 percent of this was the month of sale and 25 percent the more flowing the main percent of ce 20 and retain minum cathalance of 530,000. An opening of rock of a bocal bank lows the company ponow up to 1175.000 per quantern $1.000 homens Al bonowing is done the beginning of the month, and all payments made at the end of a month in 31.000 rements. Acoudes paid only when people repaid. The tout rate is 12 percent per 12 A quay dividend of 149.000 wil be declared and pain April borrares pay for the first quarter i be paid on Apr 15 Kandon's at 30 percent 14. The tacha balance sheets Man $40.000 Accounts rece 29.000 Fehed woods entory 20.000 Raw materialen 5.200 Plantern 200,000 Arte Depreciation 00.000 ) Case 5 4 5 41 48 Formatting c 0 E 0 H J M N o Cash Accounts receivable Finished goods inventory Raw materials inventory Plant & equipment Accumulated Depreciation Total assets March 21 $40,000 30,000 26.000 5.200 200.000 150.000) Accounts payable Income taxes payable Common stock Retained Gaming Totaltabilities and equities $12.000 50.000 52.000 1872200 1251200 repare all components of Klandon's master budget for the second quarter Use the temple to provided below to prepare the budgets and proforma statement budgeted to Budgeted sales price udgeted as revenue $ 5 April 20.000 10 200 000 Mey 50,000 10 500.000 June 30,000 10 300.000 5 $ 5 s Quarter 100,000 10 1,000,000 $ May Quader v solve your own way and solve the rest of the problem Sea Administrative Expo Buda Art. Depreciation Salus personal companion dvertising Management des Miscellaneous Bad debts 10 000 Total budgeted expenses $ 10,000 en non-cash expenses Depreciation $ Bad debts 10.000 Total cash costs $ 5 25.000 25,000 15.000 15,000 50 ODO 50,000 5 $ 5 $ $ 25 000 15.000 50.000 5 $ $ Dudgeted units - Budgeted ending inventory Tota/unts required - Beginning inventory Budgated production Aad 20,000 10.000 30,000 4,000 20 000 Max 50,000 5.000 58,000 10,000 46,000 June 30,000 5.000 35.000 0.000 29.000 Quarter 100.000 5.000 105,000 4,000 105,000 25.000 3.000 28,000 5.000 23,000 Materi Puchate de AL 26,000 May 45,000 29,000 101,000 23,000 Budgeted production Standard poundsluit Production needs +Bludgeted ending inventory - Total pounds required -Beginning inventory Anh CE Matedals Puchon Budget Gunter t01,000 20,000 46.000 29.000 23,000 Budgeted production x Standard poundslun = Production needs +Budgeted anding inventory Total pounds required -Beginning inventory -Budgeted purchases Standard price pound = Budgeted purchases cost 3 Great Labor Budget April 28.000 Max. 40,000 ADE 29,000 Quarter 101,000 Budgeted production x Standard DL Hund Total dret labor hra regured * Standard wage me Budgeted direct labor cost s 5 Manufactura Orethad.Budest Max. Quader Apal 20.000 48,000 29.000 101.000 Budgeted productos X Variable Hunt Total variable overhead Fred overhead Total budgeted Manufactung OH Less: Non-cathos Depreciation Total Dash Costs Ending lovetoy and Costs of Good Sold Budget Raw Materiale Begining Balance Purchases of materiale Les Engowy materials inventory waterlalu Food Unico Det material Dreolabor Denmead Total standard unit coat Ending ventory units Ending finished goods wory $ Cost of Goods Sold Beginning work process inventory Dictators used Draber Manufacturing overhead Total manufacturing costs Less Ending work in proceso inventory cost of goods manufactured Ad: Beginning finished goods wventory Low Ending finished goods inventory Cost of goods sold $ 5 Cash Recelts Budget Auri May June Total Cash Regis Bad Debts Accounts Receivable March sales $120,000 x 25% Apa sales $200.000 x 70% 1.200.000 $200 000 May sales $500.000 X 70% 5500,000 x 25% 3800,000 % June salos 3300,000 X 70% $300,000 x 25 300.00 % Totais 5 Cash Payments for Moldes Budget Apri May June Total Cash Payments Accounts Payable AP from March Aort purchases S60DOK ON 366.003 X 60% May purchases 100,000 180.50000 June purchases 356,800 x 16000 Total Cash Bogel Art Max Quarter Begang cash balance Collection from sales Total anth valable Los dibuat Materials purchase Dredator Manufacturing overhead seling & adinistrative expense Income taxes Equipment purchase Dividende Toineth Gabunementa Cash on deliciency Minimum cash balance Cance deficiency Financing Bonowing Repayments Intro Total franang Ending cash balance 5 Prepare a proforma income statement for the second quarter Solve Sales Cost of goods sold Gross profit Seting & administrative expense Operating income Interest expense Income before taxes Income tax expense BOS) Net Income Prepom a pro fone balance sheet as of June 30 Solve: Cash AJR Finished Goodie Raw Material inventory Property. Plant & Equipment Lowe Acumulated Depreciation Total Asset AP Income Tanes Payable Note Payable Common Stock Retained Eaming Total Liabilities & Equities Klandon Company manufactures decorative rocks for aquariums. Kin Klandon preparing the budget for the quarter ended June 30. She has gathered the folowing information May Kandon's sales manager reported at the company sold 12,000 bags of rocks in March. He has developed me following sales forecast. The expected sales prices $10 per bag. April 20,000 bags 50,000 bege June 30,000 bags July 25,000 bags August 15,000 bags 2. Sales personnel Polve a 5 percent commission on every bag of rocks sold. The following monthly fixed selling and administrative expenses are planned for the quarter. However, these amounts do not include the depreciation incaresting from the budgeted cocomentouchaten ne see Dart 7 Monthly Fred Seling and Administrative Conds Variable Costint Depreciation $10.000 Salaries of sales personnel 25.000 $0.50 Advertising 1000 Manoportant salle 10.000 Miscellaneous 500 + Bad dabts 0.50 Totalt 545.500 $1.00 3. The standard labor allowed for one bag of rooks is 15 minuter. The current direct laborrate is $10 per hour 4. Aller experiencing alouty n supplying customers in a timely fashion due to inventory shortages, the company established a policy requiring the ending finished goods nventory to equal 20 part of the folowng month's budgeted sales, in units. On March 31, 4,000 bags were on hand. se pounds of raw materials are required to fileach bag of finished rocks. The company wants to have ww materials on hand at the end of each month equal to 10 percent of the folowing mon's production needs. On March 31, 13.000 pounds of materials were on Hand The raw materials used in production cost $0.40 per pound. Half of the month's purchases is paid for the month of purchase the other half, in the following month No discount is available On June 1, a company plane to spend 540,000 to upgrade to office equipment that is Mly depreciated. The new equipments expected to have a five-year lite wth no residual value The budgeted monthly variable and total od ovomead are as follows. Variable overhead is based on the number of units produced. The fixed overhead budget is based on an annual production of 400.000 bags Fred Monthly Overhead Variable Comuni Depreciation 30.000 Indrect margin 1.000 50.00 Indirect labor 10.000 0.26 Umies 20,000 0.16 Property taxes 5,000 Maintenance 5.900 0.15 Total costs 30.4 9. Al sales are made on account. Historically, the company has collected 70 percent of its sales in the month of sale and 26 percent in the month foliowing the sale. The remaining 6 percent of sales in uncolectia 10. Kandon tus maintain a minimum cash balance of 530,000. An open le of credit at a local bank alowe the company to bomow up to $175,000 per quarter 51.000 increments 11. Al borrowing is done at the beginning of the month, and alrepayments are made of the end of a month in 31.000 increments Accrved interest in paid any when prindpalis repaid. The interest rute 12 percent per year. 12. Aquartery dividend of $40,000 wil be declared and paid in Aprk 13 income taxes payable for the first quarter will be paid on April 15 Klondon's tax rate is 30 percent 14 The March 31 balance sheet is as folow Cash Accounts receivable Finished goods inventory Raw materials inventory Plant equipment Accumulated Depreciation 540.000 30.000 20.000 5.200 200,000 150.000 E G L M Cash Accounts receivable Finished goods Inventory Raw materials inventory Punt & equipment Accumulated Depreciation Total assets $40,000 30.000 28,000 5.200 200,000 150,000) 5251 200 Accounts payable Income taxes payable Common stock Retained 3amings Total abilities and equites $12.000 50,000 52,000 137200 $251.200 equired Prepare all components of Klandon's master budget for the second quarter Use the template's provided below to prepare the budgets and pro-forme statements Sales Budget Budgeted units sold Budgeted sales pro Budgeted sales revenue Apel 20,000 10 200.000 $ $ 5 30,000 10 500.000 June 30,000 $ 10 $300,000 Ouarter 100.000 10 1 000 000 $ 5 Quarter Orsolve your own way and solve the rest of the problem Sting & Adve Expense Budget And Depreciation Sales personnel compensation Advertising Management Miscellaneous Bad debts 10,000 Total budgeted expenses $ 10,000 Lent noncath expenses Depreciation $ Bad debts 10.000 Total cash costs $ 25,000 25.000 15.000 15,000 $ $ 50,000 50,000 $ $ $ $ 25 000 15 000 50.000 $ $ $ Enchando 25,000 Ad 20.000 10,000 30,000 4.000 26.000 Budgeted unt sales + Budgeted ending inventory Total units required Beginning inventory - Budgeted production 2009 50,000 6.000 55.000 10.000 48.000 Quade 100.000 5000 105,000 8.000 101 000 30.000 5.000 35,000 6,000 29.0be 20,000 5.000 23 000 Material Dusche Budge! Art My Det 101.000 25,000 46,000 29.DOO 25.000 Budgeted production x Standard poundsunt = Producton needs Budgeted ending inventory Total pounds required - Beginning inventory - Budgeted Durchase O Matara Purchase Budget April 26,000 May 46,000 July June 29,000 Quarter 101,000 23.000 Budgeted production x Standard pounda/unit Production needs + Budgeted ending Inventory - Total pounds required - Beginning inventory - Budgeted purchases x Standard price/pound Budgeted purchases cout $ Direct Labor Budget April 26,000 May 46,000 June 29,000 Quarter 101,000 Budgeted production x Standard DL Hunit Total direct labor hrs required * Standard wage rate Budgeted direct labor cost 5 Manufacturing Overhead Budget April 26,000 May 46,000 Quarter Me 29,000 101.000 Budgeted production X Variable Hunt - Total variable overhead Fhed overhead Total budgeted Manufacturing OH Loss: Non-cash Items Depreciation Total cash costs Ending inventory and costs of Good Sold Budget Raw Materials Beginning Balance Purchases of raw materials Leo linding raw materials inventory Haw materials used Finished Goods Unit coat Direct materials Drect labor Overhead Total standard un cost * Ending inventory units Ending finished goods inventory $ $ Cost of Goods Stolt Beginning work in process inventory Dura materials used Direct labor Manufacturing overhead Total manufacturing costs Loss Ending work in process inventory Cost of good manufactured Add: Beginning finished goods inventory Loss Ending finished goods inventory Cost of goods sold 3 $ Cash Receita Rudget April May June Total Cash Roces Bad Debts Accounts Receivable March sales x fx Formatting as D E 0 K Cash Reel Budget Ari May June Total Cash Receta Bad Debts Ascounts Receivable March sales $120,000 x 25 Antales 1200.000 x 70 1200,000 x 25 5200,000 5% May tales 1500,000x70% 1500,000 255 5500,000 Buna see 5.300,000 to 1700,000 x 25% 1100, 000 KS Total 5 Cash Payments for Materials Art MY June Total Cash Payments Accounts Payable AP from March April purchases 194.000 x 14.000 x May purchases 1.600 x 5 101.600 x 50% June purchases 194 100 x 504 800 KSON 5 Cash Budget May ouane Beginning con balance Collections from sales Total cash avleble Les disbursements Materials purchas Orector Manufacturing overhead Being & administrative expense Income Equipment purchase Dividende Tutal cash disbursements Cash excess datidency Cash excess defidency Franding Borowings Repayment st Totalfiranding Ending cash balance Papar profera come test for Quartet Sore Sales Cost of goods sold K b. Prepare a pro foma income statement for the second quarter. Solve: Sales Cost of goods sold Gross profit Seling & administrative expense Operating income Interest expense Income before taxes Income tax expense (30%) Net Income $ C Prepare a pro forma balance sheet as of June 30. Solve. Cash AIR Finished Goods Raw Materials Inventory Property, Plant & Equipment Less: Accumulated Depreciation Total Assets $ 1 A/P Income Taxes Payable Note Payable Common Stock Retained Eamings Total Liabilities & Equities