5th Edition

ISBN: 9781259631122

Author: Edmonds, Thomas P.

Publisher: Mcgraw-hill Education,

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Chapter 14, Problem 11E

Exercise 7-11A Preparing a schedule of cash payments for selling and administrative expenses

The budget director for Kanosh Cleaning Services prepared the following list of expected selling and administrative expenses. All expenses requiring cash payments are paid for in the month incurred except salary expense and insurance. Salary is paid in the month following the month in which it is incurred. The insurance premium for six months is paid on October 1. October is the first month of operations; accordingly, there are no beginning account balances.

Chapter 14, Problem 11E, Exercise 7-11A Preparing a schedule of cash payments for selling and administrative expenses The

Required

a. Complete the schedule of cash payments for S&A expenses by filling in the missing amounts.
b. Determine the amount of salaries payable the company will report on its pro forma balance sheet at the end of the fourth quarter.
c. Determine the amount of prepaid insurance the company will report on its pro forma balance sheet at the end of the fourth quarter.

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Chapter 14, Problem 10E

Chapter 14, Problem 12E

Chapter 14 Solutions

Survey Of Accounting

Ch. 14 - Prob. 1Q Ch. 14 - Prob. 2Q Ch. 14 - 3.What are the three levels of planning? Explain...Ch. 14 - 4.What is the primary factor that distinguishes...Ch. 14 - 5.What is the advantage of using a perpetual...Ch. 14 - Prob. 6Q Ch. 14 - Prob. 7Q Ch. 14 - 8. Ken Shilov, manager of the marketing...Ch. 14 - Prob. 9Q Ch. 14 - 10.What is the normal starting point in developing...

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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.
Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month. b. Johnstons Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month. c. Mortondos is a womens clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale. d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree. Required: For each of the businesses described above, indicate the length of the operating cycle.
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, 20Y8, the following tentative trial balance as of December 31, 20Y7, is prepared by the Accounting Department of Mesa Publishing Co.: Cash 26,000 Accounts Receivable 23,800 Finished Goods 16,900 Work in Process 4,200 Materials 6,400 Prepaid Expenses 600 Plant and Equipment 82.000 Accumulated DepreciationPlant and Equipment 32,000 Accounts Payable 14.800 Common Stock. 1.50 par 30,000 Retained Earnings 83,100 159,900 159,900 Factory output and sales for 20Y8 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, 20Y8, 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 Fixed Variable (Total for Year) (Per Unit Sold) Cost of goods manufactured and sold: Direct materials 30.00 Direct labor B.40 Factory overhead: Depreciation of plant and equipment 4,000 Other factory overhead 1,400 4.30 Selling expenses: Sales salaries and commissions 12,800 13.50 Advertising 13,200 Miscellaneous selling expense 1,000 2.50 Administrative expenses: Office and officers salaries 7,800 7.00 Supplies 500 1.20 Miscellaneous administrative expense 400 2.40 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 35,000 on 20Y8 taxable income will be paid during 20Y8. Regular quarterly cash dividends of 0.20 per share are expected to be declared and paid in March, June, September, and December on 20,000 shares of common stock outstanding. It is anticipated that fixed assets will be purchased for 22,000 cash in May. Instructions 1. Prepare a budgeted income statement for 20Y8. 2. Prepare a budgeted balance sheet as of December 31,20Y8, with supporting calculations.

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