Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Question
Chapter 7, Problem 29E
(1)
To determine
To prepare: Merchandise purchase budget for July, August, September, October.
(1)
Expert Solution
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Explanation of Solution
Merchandise Purchase Budget | |||||
Particulars | June Amount ($) | July Amount ($) | August Amount ($) | September Amount ($) | October Amount ($) |
Budgeted sales | 350,000 | 290,000 | 320,000 | 275,000 | 265,000 |
Next month’s cost of goods sold (Working note 1) | 245,000 | 203,000 | 224,000 | 192,500 | 185,500 |
Ending inventory (Working note 2) | 49,000 | 40,600 | 44,800 | 38,500 | 37,100 |
Add: Cost of goods sold | 245,000 | 203,000 | 224,000 | 192,500 | |
Required inventory | 285,600 | 247,800 | 262,500 | 229,600 | |
Less: Opening inventory | 49,000 | 40,600 | 44,800 | 38,500 | |
Inventory to be purchased | 236,600 | 207,200 | 217,700 | 191,100 | |
Table (1) |
Working note:
Formula to calculate next month’s cost of goods sold,
Next month’s cost of goods sold | |||||
Particulars | June Amount ($) | July Amount ($) | August Amount ($) | September Amount ($) | October Amount ($) |
Budgeted sales | 350,000 | 290,000 | 320,000 | 275,000 | 265,000 |
Cost of goods sold | 245,000 | 203,000 | 224,000 | 192,500 | 185,500 |
Table (2) |
Working note:
Ending inventory | |||||
Particulars | June Amount ($) | July Amount ($) | August Amount ($) | September Amount ($) | October Amount ($) |
Next month’s cost of goods sold | 245,000 | 203,000 | 224,000 | 192,500 | 185,500 |
Ending inventory | 49,000 | 40,600 | 44,800 | 38,500 | 37,100 |
Table (3) |
(2)
To determine
To prepare: Budgeted cash payments on account payables.
(2)
Expert Solution
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Explanation of Solution
Budgeted Cash Payments on Account payables | |||||
Particulars | September Amount ($) | October Amount ($) | |||
Payment for July purchases | 35,490 | ||||
Payment for August purchases | 124,320 | 31,080 | |||
Payment for September purchases | 54,425 | 130,620 | |||
Payment for October purchases | 47,775 | ||||
Total | 214,225 | 209,475 | |||
Table (4) |
(3)
To determine
To prepare: Budgeted accounts payable for September and October.
(3)
Expert Solution
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Explanation of Solution
Budgeted cash payments on account payables | |||||
Particulars | June Amount ($) | July Amount ($) | August Amount ($) | September Amount ($) | |
Beginning accounts payable | 0 | 177,450 | 190,890 | 194,355 | |
Add: Budgeted purchases | 236,600 | 207,200 | 217,700 | 191,100 | |
Amount payable after purchases | 236,600 | 384,650 | 408,590 | 385,455 | |
Cash disbursement | |||||
Payment for July purchases | 59,1501 | 41,960 | 35,490 | ||
Payment for August purchases | 51,800 | 124,380 | 31,080 | ||
Payment for September purchases | 54,425 | 130,620 | |||
Payment for October purchases | 47,725 | ||||
Total Cash payments | 59,150 | 193,760 | 214,235 | 209,475 | |
Ending accounts payable | 177,450 | 190,890 | 194,355 | 175,980 | |
Table (5) |
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Chapter 7 Solutions
Managerial Accounting
Ch. 7 - Prob. 1MCQCh. 7 - Prob. 2MCQCh. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Identify at least three benefits of budgeting in...Ch. 7 - Prob. 2DQCh. 7 - What is the benefit of continuous budgeting?Ch. 7 - Identify three usual time horizons for short-term...Ch. 7 - Why should each department participate in...
Ch. 7 - How does budgeting help management coordinate and...Ch. 7 - Why is the sales budget so important to the...Ch. 7 - What is the selling expense budget? What is the...Ch. 7 - Prob. 9DQCh. 7 - GOOGLE Google prepares a cash budget. What is a...Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Coca-cola recently redesigned its bottle to reduce...Ch. 7 - Activity-based budgeting is a budget system based...Ch. 7 - Budget motivation C1 For each of the following...Ch. 7 - Budgeting benefits C1 For each of the following...Ch. 7 - Prob. 3QSCh. 7 - Prob. 4QSCh. 7 - Prob. 5QSCh. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QSCh. 7 - Prob. 11QSCh. 7 - Prob. 12QSCh. 7 - Prob. 13QSCh. 7 - Prob. 14QSCh. 7 - Prob. 15QSCh. 7 - Manufacturing: Production budget P1 Atlantic Surf...Ch. 7 - Prob. 17QSCh. 7 - Prob. 18QSCh. 7 - Prob. 19QSCh. 7 - Cash receipts, with uncollectible accounts P2 The...Ch. 7 - Cash receipts, with uncollectible accounts P2 Well...Ch. 7 - Prob. 22QSCh. 7 - Budgeted loan activity P2 Santos Co. is preparing...Ch. 7 - Prob. 24QSCh. 7 - Prob. 25QSCh. 7 - Prob. 26QSCh. 7 - Prob. 27QSCh. 7 - Prob. 28QSCh. 7 - Prob. 29QSCh. 7 - Prob. 30QSCh. 7 - Prob. 31QSCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Exercise 20-5 Manufacturing: Direct labor budget...Ch. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Prob. 25ECh. 7 - Prob. 26ECh. 7 - Prob. 27ECh. 7 - Prob. 28ECh. 7 - Prob. 29ECh. 7 - Prob. 30ECh. 7 - Prob. 31ECh. 7 - Prob. 32ECh. 7 - Prob. 33ECh. 7 - Prob. 34ECh. 7 - Prob. 35ECh. 7 - Prob. 1PSACh. 7 - Prob. 2PSACh. 7 - Prob. 3PSACh. 7 - Prob. 4PSACh. 7 - Prob. 5PSACh. 7 - Prob. 6PSACh. 7 - Prob. 7PSACh. 7 - Prob. 8PSACh. 7 - Prob. 1PSBCh. 7 - Prob. 2PSBCh. 7 - Prob. 3PSBCh. 7 - Prob. 4PSBCh. 7 - Prob. 5PSBCh. 7 - Prob. 6PSBCh. 7 - Prob. 7PSBCh. 7 - Prob. 8PSBCh. 7 - Prob. 7SPCh. 7 - Prob. 1AACh. 7 - Prob. 2AACh. 7 - Prob. 3AACh. 7 - ETHICS CHALLENGE C1 BTN 20-3 Both the budget...Ch. 7 - Prob. 2BTNCh. 7 - Prob. 3BTNCh. 7 - Prob. 4BTNCh. 7 - Prob. 5BTNCh. 7 - Prob. 6BTN
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