Budgeting Inventories For each independent situation below, determine the missing amounts:
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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- Budgeting InventoriesFor each independent situation below, determine the missing amounts: A B C D Beginnning inventory 8,000 Answer 5,000 Answer Produced 40,000 25,000 Answer 60,000 Available Answer Answer 26,000 66,000 Sold 45,000 30,000 Answer Answer Ending inventory Answer 10,000 8,000 1,000Prepare a Budgeted Statement of Financial Position as at 31 December 2022 using the below information: Statement of comprehensive income for the year ended 31 December 2021Sales 10 000 000Cost of sales (5 750 000)Gross profit 4 250 000Variable selling and administrative expenses (1 500 000)Fixed selling and administrative expenses (500 000)Net profit 2 250 000 Statement of financial position as at 31 December 2021ASSETSNon-current assets 800 000Property, plant and equipment 800 000Current assets 3 400 000Inventories 1 600 000Accounts receivable 600 000Cash 1 200 000 4 200…Budgeted net income for 2009 is P 19,500. Included in the budgeted income statement is depreciation of P 12,500. The changes in the trade current accounts are:Accounts Receivable (P 5,000)Merchandise Inventory P 7,000Accounts Payable P 6,000Accrued Expenses (P 2,000) Budgeted cash inflow (outflow) from operating activities must bea. P 38,000 b. (P 1,000) c. P 34,000 d. (P3,000)
- Actual results Budgeted results Previous year Industry average Current ratio 1.97 1.92 1.87 1.92 Quick asset ratio 1.06 1.06 1.06 1.11 Inventory turnover 4.21 4.91 4.86 4.76 Net profit ratio 0.05 0.03 0.03 0.03 Gross margin 0.65 0.59 0.61 0.61 Provide possible explanations for the results for the various financial ratios and outline their implications for the audit.Budgeted Income Statement and Balance SheetAs a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Mesa Publishing Co.: Cash$ 26,000Accounts Receivable23,800Finished Goods16,900Work in Process4,200Materials6,400Prepaid Expenses600Plant and Equipment82,000Accumulated Depreciation—Plant and Equipment$ 32,000Accounts Payable14,800Common Stock, $1.50 par30,000Retained Earnings83,100$159,900$159,900Factory output and sales for 20Y9 are expected to total 3,800 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year.Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:Estimated Costs and ExpensesFixed(Total for…If budgeted begin inventory is $20,600, budgeted ending inventory is $23,600, and budgeted cost of goods sold is $26,120, budgeted purchases should be?
- Budgeted Income Statement For the year ended December 31,2020 Sales(all on credit) 280 000 Cost of goods sold 128 000 Gross income 152 000 Administrative expenses 53 600 Operating income 98 400 Interest Expense 2 400 Income before tax 96 000 Income tax (40%) 38 400 Net income 57 600 Additional details: Accounts Receivable Year 1- 80,000; Year 2- 56,000 Inventory Year 1- 56,000; Year 2- 64,000 Accounts Payable Year 1- 62,400; Year 2- 68,000 (Use 360 days) Compute the following: 1. Merchandise Inventory turnover 2. Average age of inventories or number of days of inventory 3. Receivables turnover ratio 4. Average age of receivables or number of receivables average collection…E9-3A Budget Preparation Westport Company is preparing its master budget for May. Use the estimates provided to determine the amounts necessary for each of the following requirements. (Estimates may be related to more than one requirement.) a. What should total sales revenue be if territories E and W estimate sales of 50,000 and 100,000 units, respectively, and the unit selling price is $30? b. If the beginning finished goods inventory is an estimated 6,000 units and the desired ending inventory is 7,000 units, how many units should be produced? c. What dollar amount of materials should be purchased at $2 per pound if each unit of product requires 2.5 pounds and beginning and ending materials inventories should be 12,000 and 13,500 pounds, respectively? d. How much direct labor cost should be incurred if each unit produced requires 0.5 hours at an…The management of Mecca Copy, a photocopying center located on University Avenue, has compiled thefollowing data to use in preparing its budgeted balance sheet for next year:Ending BalancesCash ..................................................................... ?Accounts receivable ............................................. $8,100Supplies inventory ................................................ $3,200Equipment ............................................................ $34,000Accumulated depreciation .................................... $16,000Accounts payable ................................................. $1,800Common stock ...................................................... $5,000Retained earnings ................................................ ?The beginning balance of retained earnings was $28,000, net income is budgeted to be $11,500, and dividends are budgeted to be $4,800.Required:Prepare the company’s budgeted balance sheet.
- A companys controller is adjusting next years budget to reflect the impact of an expected 3 percent inflation rate. Listed below are selected items from next years budget before the adjustment. After adjusting for the 3 percent inflation rate, what is the companys total budget for the selected items before taxes for next year? a. 858,150 b. 860,412 c. 810,971 d. 858,971Selling and administrative expense budget and budgeted income statement Budgeted selling and administrative expenses for Scottsdale Styles Inc. in P7-4 for the year ended December 31, 2016, were as follows: Required: 1. Prepare a selling and administrative expenses budget, in good form, for the year 2016. 2. Using the information above and the budgets prepared in P7-4, prepare a budgeted income statement for the year 2016, assuming an income tax rate of 30%.Budgeted income statement and supporting budgets The budget director of Jupiter Helmets Inc., 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 May: Prepare a direct matria1s purchases budget for May.