Question 1

Down Under Products, Ltd_, ofAustralia has budgeted sales of its popular boomerang for the next four months as follows: Unit Sales Ap r '11 54, 336 May 7'5, 363 ll une 94, 886 J uly 82, 363 [ The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that endof month inventory levels must equal 20% of the following month's unit sales. The inventory at the end of March was 10,800 units. Required: Prepare a production budget by month and in total, forthe second quarter. Required production in units Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 70, 090 100, 000 160, 000 110, 000 80,000 Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 42,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Mink Caress Direct Materials Budget - Year 2 Quarter First Second Third Fourth Year Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchasedWheeling Company is a merchandiserthat provided a balance sheet as ofSeptember 30 as shown below: Hheeling Cal-pan)! Balance Sheet September 33 Assets Cash 1'. 72,280 Accounts receivable 162,369 I nvent ory 81, 669 Buildings and equipment, net of depreciation 255,339 Total assets 3\" 573:239 Liabilities and Stockholders' Equity Accounts payable 1. 233,?69 Common stock 216,339 Retained earnings 115, 589 Total liabilities and stockholders' equityr $ 5793239 ' The company is in the process of preparing a budget for October and has assembled the following data: '1. Sales are budgeted at $600,000 for October and $610,000 for November. Ofthese sales, 35% will be for cash; the remainder will be credit sales. Forty percent of a month's credit sales are collected in the month the sales are made, and the remaining 60% is collected in the following month. All of the September 30 accounts receivable will be collected in October. 2. The budgeted cost of goods sold is always 45% of sales and the ending merchandise inventory is always 30% of the following month's cost of goods sold. 3. All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and ?0% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. 4. Selling and administrative expenses for October are budgeted at $81,200, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,550 for the month. Required: 1. Using the information provided, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for October. d. The budgeted net operating income for October. e. A. budgeted balance sheet at October 31. 2. Assume the following changes to the underlying budgeting assumptions: (1] 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, [2} the ending merchandise inventory is always 10% ofthe following month's cost of goods sold, and {312096 of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following: Required: 1. Using the information provided, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. :2. The budgeted cash disbursements for merchandise purchases for October. d. The budgeted net operating income for October. e. A budgeted balance sheet at October 31. 2- Assume the following changes to the underlying budgeting assumptions: [1] 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, [2] the ending merchandise inventory is always 10% of the following month's cost of goods sold, and {3] 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for October. d. Net operating income for the month of October. e. A budgeted balance sheet at October 31. Complete this queslion by entengyour answers in the falls below. Req 1A Req 2E Reg 13 Req 1: Reg 1D Req 1E Reg ZA Reg 23 Req 2c ' Reg 2D Prepare the budgeted cash collections for October. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 1E Req 2A Req 2B Req 2C Req 2D Req 2E Prepare the budgeted merchandise purchases for October. Budgeted merchandise purchases for OctoberComplete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 1E Req 2A Req 2B Req 2C Req 2D Req 2E Prepare the budgeted cash disbursements for merchandise purchases for October. Budgeted cash disbursements for merchandise purchases for OctoberComplete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 1E Req 2A Req 2B Req 2C Req 2D Req 2E Prepare the budgeted net operating income for October. Budgeted net operating income for OctoberComplete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req 1E Req 2A Req 2B Req 2C Req 2D Req 2E Prepare a budgeted balance sheet at October 31. Wheeling Company Balance Sheet October 31 Assets Total assets Liabilities and Stockholders' Equity Total liabilities and stockholders' equityComplete this queslion by enteringywr answers in the tabs below. Req 113 Reg 13 Req 1C RBI] 1D Prepare the budgeted cash collections for October. Assume that 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2} the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Show least Complete this queson by entaengwur answers in the labs below. Prepare the budgeted merchandise purchases for October. Assume that 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month's cost of goods sold, and {3} 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Show less; Complete this question by entaingywr answers in the tabs below. Prepare the budgeted cash disbursements for merchandise purchases for October. Assume that 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2] the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3} 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Show Iess' Conulelae this question by enlaeringywr answers in the tabs below. Prepare the net operating income for the month of October. Assume that 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month,r (2) the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Show less; Complete this queslion by entering yam answers in le labs below. Prepare a budgeted balance sheet at October 31. Assume that 50% of a month's credit sales are oollected in the month the sales are made and the remaining 50% is collected in the following month, (2} the ending merchandise inventory is always 10% of the following month's 00st of goods sold, and [3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. ShroiiiiI Ive-ssh Liabilities and Stockholders' Equity _ You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company's operations: a. The cash balance on December 1 is $53,200. b. Actual sales for October and November and expected sales for December are as follows: October November December Cash sales 5 25,609 $ 89,606 5 83,200 Sale:- on account 5 410,009 $ 524,606 5 569,000 Sales on account are collected over a threemonth period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible. c. Purchases of inventory will total $318,000 for December. Thirty percent of a month's inventory purchases are paid during the month of purchase. The accounts payable remaining from November's inventory purchases total $172,000, all of which will be paid in December. d. Selling and administrative expenses are budgeted at $525 000 for December. Of this amount $57,700 is for depreciation. e. A new web server for the Marketing Department costing $82 000 will be purchased for cash during December and dividends totaling $12,000 will be paid during the month. f. The company maintains a minimum cash balance of $20,000. An open line of credit is available from the company's bank to increase its cash balance as needed. Required: 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month. Required: 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. 3. Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any,r interest will not be paid until the following month. Complete this question by entering your answers in the labs below. ReqlandZ Req3 1. Calculate the expected cash collections for December. 2. Calculate the expected cash disbursements for merchandise purchases for December. Total cash collections Cash disbursements for merchandise purchases Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month. Ashton Company Cash Budget For the Month of December Beginning cash balance Add collections from customers Total cash available Less cash disbursements: Payments to suppliers for inventory Selling and administrative expenses New web server Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowings Repayments Interest Total financing Ending cash balance