Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the information: Assets Cash Wolfpack Company Balance Sheet June 30 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Budgeting Assumptions: $ 84,800 62,200 43,400 153,000 $ 343,400 $ 62,400 100,000 181,000 $ 343,400 1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July. 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase. The accounts payable at June 30 will be paid in July. 3. The budgeted inventory balance at July 31 is $36,200. 4. Depreciation expense is $3,060 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. Required: 1. For the month of July, calculate the following: a. Budgeted sales b. Budgeted merchandise purchases c. Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31. 5. The company's cash budget for July shows expected cash collections of $94,300, expected cash disbursements for merchandise purchases of $73,800, and cash paid for selling and administrative expenses of $18,340.
Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the information: Assets Cash Wolfpack Company Balance Sheet June 30 Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity Budgeting Assumptions: $ 84,800 62,200 43,400 153,000 $ 343,400 $ 62,400 100,000 181,000 $ 343,400 1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July. 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase. The accounts payable at June 30 will be paid in July. 3. The budgeted inventory balance at July 31 is $36,200. 4. Depreciation expense is $3,060 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred. Required: 1. For the month of July, calculate the following: a. Budgeted sales b. Budgeted merchandise purchases c. Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31. 5. The company's cash budget for July shows expected cash collections of $94,300, expected cash disbursements for merchandise purchases of $73,800, and cash paid for selling and administrative expenses of $18,340.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following
information:
Assets
Cash
Wolfpack Company
Balance Sheet
June 30
Accounts receivable
Inventory
Buildings and equipment, net of depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
Budgeting Assumptions:
$ 84,800
62,200
43,400
153,000
$ 343,400
$ 62,400
100,000
181,000
$ 343,400
1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in
the month subsequent to the sale. The accounts receivable at June 30 will be collected in July.
2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the
purchase and the remaining 80% is paid in the month after the purchase. The accounts payable at June 30 will be paid in July.
3. The budgeted inventory balance at July 31 is $36,200.
4. Depreciation expense is $3,060 per month. All other selling and administrative expenses are paid in full in the month the expense
is incurred.
Required:
1. For the month of July, calculate the following:
a. Budgeted sales
b. Budgeted merchandise purchases
c. Budgeted cost of goods sold
d. Budgeted net operating income
2. Prepare a budgeted balance sheet as of July 31.
5. The company's cash budget for July shows expected cash collections of $94,300, expected cash disbursements for merchandise
purchases of $73,800, and cash paid for selling and administrative expenses of $18,340.
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