Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)

12th Edition

ISBN: 9780134491509

Author: MILLER-NOBLES, Tracie L., Mattison, Brenda L., Matsumura, Ella Mae

Publisher: PEARSON

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Textbook Question

Chapter 22, Problem P22.54BPGB

Preparing a comprehensive budgeting problem−merchandising company

Learning Objective 5, 6
6. Total cash pmts. $88,200
7. NI $300

Belton Printing Company of Baltimore has applied for a loan. Its bank has requested a budgeted income statement for the month for the month of April 2018 and a balance sheet at April 30, 2018, balance sheet follows:

BELTON PRINTING COMPANYBalance SheetMarch 31, 2018
Assets
Current Assets:
Cash	$51,100
Accounts Receivable	13,600
Merchandise Inventory	12,000
Total Current Assets		$76,700
Property, Plant, and Equipment:
Equipment and Fixtures	81,100
Less: Accumulated Depreciation	(12,400)	68,700
Total Assets		$145,400
Liabilities
Current Liabilities:
Accounts Payable		$8,300
Stockholders’ Equity
Common Stock, no par	$35,000
Retained Earnings	102,100
Total Stockholders’ Equity		137,100
Total Liabilities and Stockholders’ Equity		$145,400

As Belton Printings controller, you have assembled the following additional information:

a. April dividends of $7,000 were declared and paid.
b. April capital expenditures of $17,000 budgeted for cash purchase of equipment.
c. April depreciation expense, $800.
d. Cost of goods sold, 55% of sales.
e. Desired ending inventory for April is $24.800.
f. April selling and administrative expenses includes salaries of $29,000, 20% of which will be paid in cash and the remainder paid next month.
g. Additional April selling and administrative expenses also include miscellaneous expenses of 10% of sales, all paid in April.
h. April budgeted sales, $86,000, 80% collected in April and 20% in May.
i. April cash payments of March 31 liabilities incurred for March purchases of inventory, $8,300.
j. April purchases of inventory, $22,900 for cash and $37,200 on account. Half the credit purchases will be paid in April and half in May.

Requirements

1. Prepare the sales budget for April.
2. Prepare the inventory, purchases, and cost of goods sold budget for April.
3. Prepare the selling and administrative expense budget for April.
4. Prepare the schedule of cash receipts from customers for April.
5. Prepare the schedule of cash payments for selling and administrative expenses for April.
6. Prepare the cash budget for April. Assume the company does not use short-term financing to maintain a minimum cash balance.
7. Prepare the budgeted income statement for April.
8. Prepare the budgeted balance sheet at April 30, 2018.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 22, Problem P22.53BPGB

Chapter 22, Problem P22.55BPGB

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Chapter 22 Solutions

Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)

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