1. Prepare a Sales Budget 2. Determine a production volume.3. Estimate manufacturing cost and operating expense. a. Purchase (material budget)b. Personnel budgetc. Overhead budgetd. Selling and Administrative budget4. Determine cash flow and other financial effects. a. Cash collection scheduleb. Cash disbursement for purchases, factory overhead, and selling and administrative expense. c. Cash budget5. Formulate Projected Financial Statement (As of December 31, 3021)a. Budgeted cost of goods manufacturedb. Budgeted income statementc. Budgeted Balance Sheet 5:01 AM234Tutor.docxThe following are the assumptions to be used:Tony & Natalie CompanyStatement of Financial PositionAs of December 31, 2020Current AssetsCurrent LiabilitiesCash18,000Accounts Payable (N2)240,000Accounts Receivable (N1)1,192,000Taxes Payable13,200Less: Uncollectible accounts(22,400) 1,169,600Dividends Payable500,000InventoriesTotal Current Liabilities753,200Raw Materials (12,000 pounds)30,000Finished Goods (4,000 units)140,000170,0001,357,600Total Current AssetsStockholder's EquityCommon Stock (100,000 shares)Retained Earnings500,000Non-current Assets360,400Property, plant, and equipment320,000Total Stockholder's Equity860,400Less: Accumulated depreciation(64,000)256,000Total Assets1,613,600SHE1,613,600N1 2020 3rd quarter sales P2,500,000P2020 4th quarter sales P3,100,000N2 2020 3rd quarter purchases P300,00075,0002020 4th quarter purchases P330,000studv1. Estimated unit sales for the first quarter of 2021 is 40,000 units and expected to increase 10%2nd3rd4thQuarterUnit pricedrettriaCourseHero.com666262Assume that of each quarter's sales: 20% are cash sales while the remaining 80% are creditsales. Tony & Natalie Company estimates that 60% of credit sales are collected in the quarter ofsale with 2% discount, 30% in the quarter of following sale, 9% in the second quarter followingsale and 1% are considered as uncollectible.is study source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00ps://www.coursehero.com/file/91359237/Tutordocx/88Mobile viewPreviewProjectionEdit sale and 1% are considered as uncollectible.source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00w.coursehero.com/file/91359237/Tutordocx/2. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished goodending inventory is equal to 10% of the next quarter sales while raw materials endinginventory is equal to 10% of the next quarter production needs of materials. First quarter of2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds.(Units are rounded to the nearest ones.)3. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in thefollowing quarterand the remainder in the second quarter following the purchase.4. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on theend of each month.5. For Factory overhead budget, use the following cost formula:Indirect laborPO.02 per direct labor worked (same paymentscheme with direct labor) Indirect materialInsuranceP48,000 annually, paid at thebeginning of the year Factory rentmonthSutterstocsUtilitiesP500 per quarter plusPO.50 per unit produced MaintenanceP300per quarter plus PO.30 per unit producedDepreciation10% of the PPE cosannuallyAll overhead costs involve cash outlays are paid in the period which they are incurred,insurance cost. Worthy to note, the company assumes that all indirect materials are used andpaid in the month itdywas purchased.6. Selling and administrative expensesAdvertisingbeginning of the year Commissionsales, paid quarterlyP65,000 annually, paid at the5% of totalAdmin salariesP100,000 per quarter (same paymentscheme with direct labor) Office rentP5,000 per month7. Income tax is 30%, paid on the first quarter of the following year.source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00v.coursehero.com/file/91359237/Tutordocx/8. For cash budget, assume the following:a. The company desires to maintain P15,000 minimum cash balanceDividend inor iseu edTaisVCotrseHero.com

Answered: 1. Estimated unit sales for the first…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. Prepare a Sales Budget

2. Determine a production volume.

3. Estimate manufacturing cost and operating expense.

a. Purchase (material budget)

b. Personnel budget

c. Overhead budget

d. Selling and Administrative budget

4. Determine cash flow and other financial effects.

a. Cash collection schedule

b. Cash disbursement for purchases, factory overhead, and selling and administrative expense.

c. Cash budget

5. Formulate Projected Financial Statement (As of December 31, 3021)

a. Budgeted cost of goods manufactured

b. Budgeted income statement

c. Budgeted Balance Sheet

5:01 AM
234
Tutor.docx
The following are the assumptions to be used:
Tony & Natalie 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)
1,192,000
Taxes Payable
13,200
Less: Uncollectible accounts
(22,400) 1,169,600
Dividends Payable
500,000
Inventories
Total Current Liabilities
753,200
Raw Materials (12,000 pounds)
30,000
Finished Goods (4,000 units)
140,000
170,000
1,357,600
Total Current Assets
Stockholder's Equity
Common Stock (100,000 shares)
Retained Earnings
500,000
Non-current Assets
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
SHE
1,613,600
N1 2020 3rd quarter sales P2,500,000
P
2020 4th quarter sales P3,100,000
N2 2020 3rd quarter purchases P300,000
75,000
2020 4th quarter purchases P330,000
studv
1. Estimated unit sales for the first quarter of 2021 is 40,000 units and expected to increase 10%
2nd
3rd
4th
Quarter
Unit price
drettriaCourseHero.com
66
62
62
Assume that of each quarter's sales: 20% are cash sales while the remaining 80% are credit
sales. Tony & Natalie Company estimates that 60% of credit sales are collected in the quarter of
sale with 2% discount, 30% in the quarter of following sale, 9% in the second quarter following
sale and 1% are considered as uncollectible.
is study source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00
ps://www.coursehero.com/file/91359237/Tutordocx/
88
Mobile view
Preview
Projection
Edit

sale and 1% are considered as uncollectible.
source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00
w.coursehero.com/file/91359237/Tutordocx/
2. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good
ending inventory is equal to 10% of the next quarter sales while raw materials ending
inventory is equal to 10% of the next quarter production needs of materials. First quarter of
2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds.
(Units are rounded to the nearest ones.)
3. Each quarter's purchase are paid 50% in that quarter with 5% purchase discount, 25% in the
following quarter
and the remainder in the second quarter following the purchase.
4. Each finished goods requires 5 direct labor hours with an hourly rate of P4.00 payable on the
end of each month.
5. For Factory overhead budget, use the following cost formula:
Indirect labor
PO.02 per direct labor worked (same payment
scheme with direct labor) Indirect material
Insurance
P48,000 annually, paid at the
beginning of the year Factory rent
month
Sutterstocs
Utilities
P500 per quarter plus
PO.50 per unit produced Maintenance
P300
per quarter plus PO.30 per unit produced
Depreciation
10% of the PPE cos
annually
All overhead costs involve cash outlays are paid in the period which they are incurred,
insurance cost. Worthy to note, the company assumes that all indirect materials are used and
paid in the month it
dy
was purchased.
6. Selling and administrative expenses
Advertising
beginning of the year Commission
sales, paid quarterly
P65,000 annually, paid at the
5% of total
Admin salaries
P100,000 per quarter (same payment
scheme with direct labor) Office rent
P5,000 per month
7. Income tax is 30%, paid on the first quarter of the following year.
source was downloaded by 100000807232847 from CourseHero.com on 05-05-2021 01:06:19 GMT -05:00
v.coursehero.com/file/91359237/Tutordocx/
8. For cash budget, assume the following:
a. The company desires to maintain P15,000 minimum cash balance
Dividend i
nor iseu ed
Tais
VCotrseHero.com

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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