Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed. Requirement1a: Budgeted sales for the month of July shall be determined.

Question

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Answer 1

Question

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

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Chapter 15 Homework 13 Saved Help Save & Exit Submit Part 1 of 2 0.83 points eBook Ask Required information Use the following information to answer questions. (Algo) [The following information applies to the questions displayed below.] Information on Kwon Manufacturing's activities for its first month of operations follows: a. Purchased $100,800 of raw materials on credit. b. Materials requisitions show the following materials used for the month. Job 201 Job 202 Total direct materials Indirect materials Total materials used $ 49,000 24,400 73,400 9,420 $ 82,820 c. Time tickets show the following labor used for the month. Print References Job 201 $ 40,000 Job 202 13,400 Total direct labor 53,400 25,000 $ 78,400 Indirect labor Total labor used d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost. e. Transferred Job 201 to Finished Goods Inventory. f. Sold Job 201 for $166,160 on credit. g. Incurred the following actual other…

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Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000; Costs = $2, 173,000; Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes $76,000; Dividends $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed. a) Compute the cash flow from assets b) Compute the net change in working capital (325 marks)

Answer 2

Question

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

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Answer 3

Question

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

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Answer 4

Question

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

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Answer 5

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

Answer 6

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Answer 7

Chapter 8, Problem 18E

To determine

Budgets are prepared for maintaining the budgetary control over various department. The standard budgeted figures are given to each department for comparison with their actual figures. The budget preparation is started from preparation of sales budget and other budgets to be followed.

Requirement1a:

Budgeted sales for the month of July shall be determined.

Answer 8

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Sales for the month of July shall be prepared as under:

STATEMENT SHOWING BUDGETED SALES FOR THE MONTH OF JULY
	AMOUNT $
Total cash collections for the month	77,000
Less: Collections of Accounts receivable of June 30	50,000
Collections of Current month sales	27,000
(which is 30% of Monthly total sales)
Monthly Total sales of July (27,000/30%)	90,000

Note: The Accounts receivable at the end of July will be $63,000 ($90,000-$27,000)

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The Budgeted sales shall be computed in this case by way of reverse calculations. The collections from previous Accounts receivable shall be deducted from total collections to compute the collections of current month sales. Then, the trend of collections shall be taken to compute the total sales of the month, which will be the budgeted sales of the month.

Answer 13

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Answer 14

Requirement1b:

To determine

Budgeted Purchase for the month of July shall be determined.

Answer 15

Requirement1b:

Expert Solution

Answer to Problem 18E

Solution: The budgeted Purchases for the month of July shall be prepared as follows:

STATEMENT SHOWING BUDGETED MERCHANDISE PURCHASE FOR JULY
	AMOUNT $
Total cash disbursement	44,500
Less: Disbursement of Accounts Payable of June 30	35,300
Disbursement for current month purchases	9,200
(which is 20% of total purchases)
Monthly Total purchases of July (9,200/20%)	46000

Note: Accounts payable balance at the end of July will be $36,800 ($46,000 - $9,200)

Answer 16

Requirement1b:

Expert Solution

Answer 17

Requirement1b:

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The Budgeted Purchases shall be computed in this case by way of reverse calculations. The Disbursals to previous Accounts payable shall be deducted from total disbursals to compute the disbursals of the current month purchases. Then, the trend of disbursals shall be taken to compute the total Purchases of the month, which will be the budgeted Purchases of the month.

Answer 20

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Answer 21

Requirement1c:

To determine

The Budgeted Cost of goods sold for the month of July shall be determined.

Answer 22

Requirement1c:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted cost of goods sold shall be prepared as under:

STATEMENT SHOWING BUDGETED COST OF GOODS SOLD FOR JULY
	AMOUNT $
Beginning Inventory	30,000
Add: July month Purchases	46,000
Less: Ending Inventory on July 31	22,000
Budgeted Cost of Goods sold	54,000

Answer 23

Requirement1c:

Expert Solution

Answer 24

Requirement1c:

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

The budgeted cost of goods sold shall be prepared based on the adjustment being made for the beginning and ending inventory in hand in the total purchases of the month.

Answer 27

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Answer 28

Requirement1d:

To determine

The Budgeted Net operating income for the month of July shall be determined.

Answer 29

Requirement1d:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted net operating income for the month of July shall be computed as under:

STATEMENT SHOWING BUDGETED NET OPERATING INCOME FOR JULY
	AMOUNT $
Budgeted Sales for the month	90,000
Less: Budgeted Cost of goods sold	54,000
Gross Margin	36,000
Less: Expense
Depreciation expense	3,000
Selling and administrative expense	15,000
Net Operating Income	18,000

Note: The net Operating income of the month is added in the balance of Retained earnings. Therefore, the ending balance of Retained earnings will be $287,700.

Answer 30

Requirement1d:

Expert Solution

Answer 31

Requirement1d:

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

The Budgeted Net operating income statement is computed by deducting the cost of goods sold from the sales revenue to come to Gross margin. The depreciation and other selling and administrative expense shall be deducted from the gross margin to arrive at the net operating income of the company.

Answer 34

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.

Answer 35

Requirement2:

To determine

The budgeted balance sheet as on July 31 shall be prepared.

Answer 36

Requirement2:

Expert Solution

Answer to Problem 18E

Solution: The Budgeted Balance Sheet shall be made as under:

WOLFPACK COMPANY BALANCE SHEET AS ON JULY 31
	AMOUNT $
Assets:
Cash	92,500
Accounts receivable	63,000
Inventory	22,000
Building and equipment, net of depreciation	147,000
Total Assets	324,500
Liabilities:
Accounts Payable Stockholder’s equity:	36800
Retained earnings	287700
Total Liabilities and Stockholder’s Equity	324,500

Answer 37

Requirement2:

Expert Solution

Answer 38

Requirement2:

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

The Budgeted balance Sheet shall be prepared on the basis of total assets and liabilities of the company. The ending cash balance of company as on July 31 shall be computed as under:

STATEMENT SHOWING CASH BALANCE AT THE END OF JULY
	AMOUNT $
Beginning Balance of cash	75,000
Add: Cash collections	77,000
Less: Cash disbursals for purchases	44,500
Less: Cash payment for selling and Administrative expense	15,000
Ending Balance of cash	92,500

Answer 41

Conclusion

To conclude, it can be said that after computing the various budgeted amounts, the Budgeted Balance Sheet shall be prepared on the basis of these amount.