INTRO MGRL ACCT LL W CONNECT
8th Edition
ISBN: 9781266376771
Author: BREWER
Publisher: MCG
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Textbook Question
Chapter IE, Problem 12IE
Refer to the information pertaining to Endless Mountain Company that is provided in Integration Exercise 8 as well as the schedules that you prepared in answering Integration Exercises 8 through 11.
Required:
1. Assume that the company expects to collect all of its credit sales in the quarter of sale rather than the original assumption that it will collect 75% of credit sales in the quarter of sale and the remaining 25% in the subsequent quarter. Without changing any of the underlying assumptions in your budgeting assumptions tab, calculate the following revised figures
related to the 2017 budget:
a. Net income (absorption basis).
b. Accounts receivable turnover.
c. Net cash provided by operating activities.
2. Go to the Budgeting Assumptions tab in your Microsoft Excel worksheet. Change the percentage of sales that are collected in the quarter of sale to 100% and the percentage of sales that are collected in the quarter after sale to 0%. Do your answers to la through 1c match the numbers that appear in your Excel worksheet? If not. why?
3. Refer to the original budgeting assumptions from Integration Exercise 8. Assume that the company expects to pay its direct laborers $19 per hour instead of the original estimate of $ 18 per hour. Without changing any of the underlying assumptions in your budgeting assumptions tab, calculate the following revised figures related to the 2017 budget:
a. Ending finished goods inventory at December 31. 2017.
b. The Break-Even point in unit sales.
c. Variable costing net operating income.
4. Go to the Budgeting Assumptions tab in your Microsoft Excel worksheet. Change the direct labor cost per hour from $18 to $19. Do your answers to 3a through 3c match the numbers that appear in your Excel worksheet? If not, why?
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Shrek & Fiona Company
Statement of Financial Position
As of December 31, 2020
Current Assets
Current Liabilities
Cash
18,000
Accounts Payable (N2)
240,000
Accounts Receivable (N1)
Taxes Payable
Dividends Payable
1,192,000
13,200
Less: Uncollectible accounts
(22,400) 1,169,600
500,000
Inventories
Total Current Liabilities
753,200
Raw Materials (12,000 pounds)
30,000
Finished Goods (4,000 units)
140,000
170,000
Total Current Assets
1,357,600
Stockholder's Equity
Common Stock (100,000 shares)
500,000
Non-current Assets
Retained Earnings
360,400
Property, plant, and equipment
320,000
Total Stockholder's Equity
860,400
Less: Accumulated depreciation
(64,000)
256,000
Total Assets
1,613,600
Total Liabilities and SHE
1,613,600
N1 2020 3rd quarter sales P2,500,000
2020 4th quarter sales P3,100,000
200,000
992,000
1,192,000
75,000
165,000
N2 2020 3rd quarter purchases P300,000
2020 4th quarter purchases P330,000
240,000
1. Estimated unit sales for the first quarter of 2021 is…
Which of the following is true with respect to the sales budget?
Group of answer choices
It provides sales data to prepare the budgeted income statement.
It captures the variable and fixed expenses of the business.
It has no relation with the production budget.
It provides sales data to prepare income statements for stockholders and creditors.
Chapter IE Solutions
INTRO MGRL ACCT LL W CONNECT
Ch. IE - INTEGRATION EXERCISE I Different Costs for...Ch. IE - Absorption Costing, Variable Costing, Cost,...Ch. IE - Cash Budget, Income Statement, Balance Sheet,...Ch. IE - Prob. 4IECh. IE - Plantwide and Departmental Overhead Allocation;...Ch. IE - Normal Costing versus Actual Costing Darwin...Ch. IE - Prob. 7IECh. IE - Master Budgeting Endless Mountain Company...Ch. IE - Statement of Cash Flows Refer to the information...Ch. IE - Financial Statement Ratio Analysis Refer to the...
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