Problem 14-20A (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. January $240, 000 February $232,000 $272,000 March Cash receipts Cash payments For inventory purchases For SSA expenses 220, 000 62,000 164,000 64,000 190,000 54,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.)

Problem 14-20A (Static) Preparing a cash budget LO 14-5 Fayette Medical Clinic has budgeted the following cash flows. January $240, 000 February $232,000 $272,000 March Cash receipts Cash payments For inventory purchases For SSA expenses 220, 000 62,000 164,000 64,000 190,000 54,000 Fayette Medical had a cash balance of $16,000 on January 1. The company desires to maintain a cash cushion of $10,000. Funds are assumed to be borrowed, in increments of $2,000, and repaid on the last day of each month; the interest rate is 1 percent per month. Repayments may be made in any amount available. Fayette pays its vendors on the last day of the month also. The company had a monthly $80,000 beginning balance in its line of credit liability account from last year's quarterly results. Required Prepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to the nearest whole dollar amounts.)

Name: RequiredPrepare a cash budget. (Any repayments should be indicated wi
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: RequiredPrepare a cash budget. (Any repayments should be indicated with a minus sign. Round intermediate and final answers to thenearest whole dollar amounts.)Cash BudgetJanuaryFebruaryMarchSection 1: Cash receipts%24Total cash availableSection 2: C

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter21: Budgeting

Section: Chapter Questions

Problem 21.5APR: Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of...

See similar textbooks

Similar questions

Budgeted income statement and supporting budgets The, budget director of Feathered Friends 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 December 2016: a. Estimated .sales for December: Bird house 3,200 units at 50 per unit Bird feeder 3,000 units at 70 per unit b. Estimated inventories at December 1: Direct materials: Finished products: Wood 200 ft Bird house....... 320 units at 27 per unit Plastic 240 lbs. Bird feeder....... 270 units at 40 per unit c. Desired inventories at December 31: Direct materials: Finished products: Wood 220 ft Bird house....... 290 units at 27 per unit Plastic 200 lbs. Bird feeder....... 250 units at 41 per unit d. Direct materials used in production: In manufacture of Bird House: In manufacture of Bird Feeder: Wood 0.80 ft. per unit of product Wood........... 1.20 ft per unit of product Plastic 050 lb. per unit of product Plastic........... 0.75 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood 7.00 per ft. Plastic................. 1.00 per lb. f. Direct labor requirements: Bird House: Fabrication Department 0.20 hr. at 16 per hr. Assembly Department 0.30 hr. at 12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at 16 per hr. Assembly Department 0.35 hr. at 12 per hr. g. Estimated factory overhead costs for December. Indirect factory wages 75,000 Power and light 6,000 Depreciation of plant and equipment 23,000 Insurance and property tax 5,000 h. Estimated operating expenses for December: Sales salaries expense 70,000 Advertising expense 18,000 Office salaries expense 21,000 Depreciation expenseoffice equipment 600 Telephone expenseselling 550 Telephone expenseadministrative 250 Travel expenseselling 4,000 Office supplies expense 200 Miscellaneous administrative expense 400 i. Estimated other income and expense for December: Interest revenue 200 Interest expense 122 j. Estimated lax rate: 30% Instructions 1. Prepare a sales budget for December. 2. Prepare a production budget for December. 3. Prepare a direct materials purchases budget for December. 4. Prepare a direct labor cost budget for December. 5. Prepare a factory overhead cost budget for December. 6. Prepare a cost of goods sold budget for December. Work in process at the beginning of December is estimated to be 29,000 and work in process at the end of December is estimated to be 35,400. 7. Prepare a selling and administrative expenses budget for December. 8. Prepare a budgeted income statement for December.
Budgeted income statement and supporting budgets The budget director of Birds of a Feather 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 January: a. Estimated sales for January: Birdhouse 6.000 units at 55 per unit Bird feeder 4,500 units at 75 per unit b. Estimated inventories at January 1: Direct materials: Finished products: Wood 220 ft. Birdhouse 300 units at 23 per unit Plastic 250 lb. Bird feeder 240 units at 34 per unit c. Desired inventories at January 31: Direct materials: Finished products: Wood 180 ft. Birdhouse 340 units at 23 per unit Plastic 210 lb. Bird feeder 200 units at 34 per unit d. Direct materials used in production: In manufacture of Birdhouse: In manufacture of Bird Feeder: Wood ... 0.80 ft. per unit of product Wood 1.20 ft. per unitof product Plastic . . 0.50 lb. per unit of product Plastic 0.75 lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Wood 8.00 per ft. Plastic 1.20 per lb. f. f. Direct labor requirements: Birdhouse: Fabrication Department 0.20 hr. at15 per hr. Assembly Department 0.30 hr. at 12 per hr. Bird Feeder: Fabrication Department 0.40 hr. at15 per hr. Assembly Department 0.35 hr. at 12 per hr. g. Estimated factory overhead costs for January: Indirect factory wages 80,000 Power and light 8,000 Depreciation of plant and equipment 25,000 Insurance and property tax 2,000 h. Estimated operating expenses for January: Sales salaries expense 90,000 Advertising expense 20,000 Office salaries expense 18,000 Depredation expenseoffice equipment 800 Telephone expenseselling 500 Telephone expenseadministrative 200 Travel expenseselling 5,000 Office supplies expense 250 Miscellaneous administrative expense 450 i. Estimated other income and expense for January: Interest revenue 300 Interest expense 224 j. Estimated tax rate: 30% Instructions 1. Prepare a sales budget for January. 2. Prepare a production budget for January. 3. Prepare a direct materials purchases budget for January. 4. Prepare a direct labor cost budget for January. 5. Prepare a factory overhead cost budget for January. 6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be 29,000, and work in process at the end of January is estimated to be 35,400. 7. Prepare a selling and administrative expenses budget for January. 8. Prepare a budgeted income statement for January.
Budgeted income statement and supporting budgets 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 2016: a. Estimated sales for March: Batting helmet 1,200 units at 40 per unit Football helmet 6,500 units at 160 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Plastic 90 lbs. Batting helmet........ 40 units at 25 per unit Foam lining 80 lbs. Football helmet....... 240 units at 77 per unit c. Desired inventories at March 31: Direct materials: Finished products: Plastic50 lbs. Batting helmet......... 50 units at 25 per unit Foam lining65 lbs. Football helmet........ 220 units at 78 per unit d. Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lbs. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lbs. per unit of product Foam lining 1.50 lbs. per unit of product e. Anticipated cost of purchases and beginning and ending inventor) of direct materials: Plastic 6.00 per lb. Foam lining 4.00 per lb. f. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at 20 per hr. Assembly Department 0.50 hr. at 14 per hr. Football helmet: Molding Department 0.50 hr. at 20 per hr. Assembly Department 1.80 hrs. at 14 per hr. g. Estimated factory overhead costs for March: Indirect factory wages 86,000 Power and light 4,000 Depreciation of plant and equipment 12,000 Insurance and property tax 2,300 h. Estimated operating expenses for March: Sales salaries expense 184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expenseoffice equipment 3,800 Telephone expenseselling 5,800 Telephone expenseadministrative 1,200 Travel expense-selling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 i. Estimated other income and expense for March: Interest revenue 940 Interest expense 872 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.
Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 2017, the following tentative trial balance as of December 31, 2016, is prepared by the Accounting Department of Regina Soap Co.: Cash............................................................. 85,000 Accounts Receivable............................................... 125,600 Finished Goods................................................... 69,300 Work in Process................................................... 32,500 Materials......................................................... 48,900 Prepaid Expenses................................................. 2,600 Plant and Equipment.............................................. 325,000 Accumulated Depreciation Plant and Equipment.................. 156,200 Accounts Payable................................................. 62,000 Common Stock, 10 par........................................... 180,000 Retained Earnings................................................. 290,700 688,900 688,900 Factory output and sales for 2017 are expected to total 200,000 units of product, which are to be sold at 5.00 per unit. The quantities and costs of the inventories at December 31, 2017, 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 Expenses Cost of goods manufactured and sold: Fixed (Total for Year) Direct materials................................................ 1.10 Direct labor.................................................... 0.65 Factory overhead: Depreciation of plant and equipment.......................... 40,000 Other factory overhead....................................... 12,000 0.40 Selling expenses: Sales salaries and commissions.................................. 46,000 0.45 Advertising.................................................... 64,000 Miscellaneous selling expense.................................. 6,000 0.25 Administrative expenses: Office and officers salaries...................................... 72,400 0.12 Supplies....................................................... 5,000 0.10 Miscellaneous administrative expense........................... 4,000 0.05 Balances, of accounts receivable, prepaid expenses, and accounts payable at the end of the year are not expected to differ significantly from the beginning balances. Federal income tax of 30,000 on 2017 taxable income will be paid during 2017. Regular quarterly cash dividends of 0.15 per share are expected to be declared and paid in March, June, September, and December on 18,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for 75,000 cash in May. Instructions 1. Prepare a budgeted income statement for 2017. 2. Prepare a budgeted balance sheet as of December 31, 2017, with supporting calculations.
Budgeted income statement and supporting budgets 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: a. Estimated sales for March: Batting helmet 1,200 units at 40 per unit Football helmet 6,500 units at 160 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Plastic 90 lb. Batting helmet 40 units at 25 per unit Foam lining 80 lb. Football helmet 240 units at 77 per unit c. Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lb. Batting helmet 50 units at 25 per unit Foam lining 65 lb. Football helmet 220 its at 78 per unit d. Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic 6.00 per lb. Foam lining 4.00 per lb. f. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at 20 per hr. Assembly Department 0.50 hr. at 14 per hr. Football helmet: Molding Department 0.50 hr. at 20 per hr. Assembly Department l.80 hrs.at 14perhr. g. Estimated factory overhead costs for March: Indirect factory wages 86,000 Power and light 4,000 Depreciation of plant and equipment 12,000 Insurance and property tax 2300 h. Estimated operating for March: Sales salaries expense 184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expenseoffice equipment 3,800 Telephone expenseselling 5,800 Telephone expenseadministrative 1,200 Travel expenseselling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 i. Estimated other income and expense for March: Interest Revenue 940 Interest Expense 872 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. 9.Prepare a factory overhead cost budget for March. 10.Prepare a cost of goods .sold budget for March. Work in process at the beginning of March is estimated to the 115,300, and work in process at the end of March is desired to be 14,800. 11.Prepare a selling and administrative expenses budget for March. 12.Prepare a budgeted income statement for March.
Budgeted income statement and supporting budgets 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: a. Estimated sales for March: Batting helmet 1,200 units at 40 per unit Football helmet 6,500 units at 160 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Plastic 90 lb. Batting helmet 40 units at 25 per unit Foam lining 80 lb. Football helmet 240 units at 77 per unit c. Desired inventories at March 31: Direct materials: Finished products: Plastic 50 lb. Batting helmet 50 units at 25 per unit Foam lining 65 lb. Football helmet 220 its at 78 per unit d. Direct materials used in production: In manufacture of batting helmet: Plastic 1.20 lb. per unit of product Foam lining 0.50 lb. per unit of product In manufacture of football helmet: Plastic 3.50 lb. per unit of product Foam lining 1.50lb. per unit of product e. Anticipated cost of purchases and beginning and ending inventory of direct materials: Plastic 6.00 per lb. Foam lining 4.00 per lb. f. Direct labor requirements: Batting helmet: Molding Department 0.20 hr. at 20 per hr. Assembly Department 0.50 hr. at 14 per hr. Football helmet: Molding Department 0.50 hr. at 20 per hr. Assembly Department l.80 hrs.at 14perhr. g. Estimated factory overhead costs for March: Indirect factory wages 86,000 Power and light 4,000 Depreciation of plant and equipment 12,000 Insurance and property tax 2300 h. Estimated operating for March: Sales salaries expense 184,300 Advertising expense 87,200 Office salaries expense 32,400 Depreciation expenseoffice equipment 3,800 Telephone expenseselling 5,800 Telephone expenseadministrative 1,200 Travel expenseselling 9,000 Office supplies expense 1,100 Miscellaneous administrative expense 1,000 i. Estimated other income and expense for March: Interest Revenue 940 Interest Expense 872 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. 9.Prepare a factory overhead cost budget for March. 10.Prepare a cost of goods .sold budget for March. Work in process at the beginning of March is estimated to the 115,300, and work in process at the end of March is desired to be 14,800. 11.Prepare a selling and administrative expenses budget for March. 12.Prepare a budgeted income statement for March.
CASH BUDGETING Helen Bowers, owner of Helens Fashion Designs, is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2014 and 2015: May 2014 180,000 June 180,000 July 360,000 August 540,000 September 720,000 October 360.000 November 360,000 December 90,000 January 2015 180.000 Estimates regarding payments obtained from the credit department are as follows: collected within the month of sale, 10%; collected the month following the sale, 75%; collected the second month following the sale, 15%. Payments for labor and raw materials are made the month after these services were provided. Here are the estimated costs of labor plus raw materials: May 2014 90,000 June 90,000 July 126,000 August 882.000 September 306,000 October 234,000 November 162,000 December 90,000 General and administrative salaries are approximately 27,000 a month. Lease payments under long-term leases are 9,000 a month. Depreciation charges are 36,000 a month. Miscellaneous expenses arc S2,700 a month. Income tax payments of 63,000 arc due in September and December. A progress payment of 180,000 on a new design studio must be paid in October. Cash on hand on July 1 will be 132,000, and a minimum cash balance of 90,000 should be maintained throughout the cash budget period. a. Prepare a monthly cash budget for the last 6 months of 2014. b. Prepare monthly estimates of the required financing or excess funds that is, the amount of money Bowers will need to borrow or will have available to invest. c. Now suppose receipts from sales come in uniformly during the month (that is, cash receipts come in at the rate of 130 each day), but all outflows must be paid on the 5th. Will this affect the cash budget? That is, will the cash budget you prepared be valid under these assumptions? If not, what could be done to make a valid estimate of the peak financing requirements? No calculations are required, although if you prefer, you can use calculations to illustrate the effects. d. Bowers sales are seasonal; and her company produces on a seasonal basis, just ahead of sales. Without making any calculations, discuss how the companys current and debt ratios would vary during the year if all financial requirements were met with short-term bank loans. Could changes in these ratios affect the firms ability to obtain bank credit? Explain.