Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan. Compute the expected cash collections for April, May, and June.

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Answer 1

Question

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.

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

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Sp25 ACCT X CengageNOWv2 | Online teaching X exhibit 6.4.jpg 71x399) x + bw.com/ilrn/takeAssignment/takeAssignmentMain.do?inprogress=true FIFO perpetual inventory The beginning inventory at Dunne Co. and data on purchases and sales for a three-month period ending June 30 are Number Date Transaction of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 < 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000 Required: 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illust first-in, first-out method. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER un Check My Work 3 more Check My Work uses remaining Q Search hp

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Calm Ltd has the following data relating tò two investment projects, only one of which mayb e s e l e c t e d :The cost of capital is 10 per cent, and depreciation is calculated using straight line method.a . Calculate for each of the project:i. Average annual accounting rate of return on average capital investedi i . Net Present Valuei l l . I n t e r n a l R a t e o f Returnb. Discuss the relative merits of the methods of evaluation mentioned above in (a).Q.4a . In the context of process costing, discuss the following concepts briefly, i . Equivalent unitsNormal lossill. Abnormal lossi v. Joint productsV . By productsb . Discuss the different types of standard costing and objectives of standard costing.

Answer 2

Question

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.

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

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Answer 3

Question

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.

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

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Answer 4

Question

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.

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

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Answer 5

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

Answer 6

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

Answer 7

Chapter 8, Problem 8.27P

1

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash collections for April, May, and June.

Answer 8

1

Expert Solution

Answer to Problem 8.27P

The expected cash collection for April is $104,000; May is $106,800; and June is $123,600.

Answer 9

1

Expert Solution

Answer 10

1

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Particulars	April	May	June	Total
Cash sales	$60,000	$66,000	$78,000	$204,000

Credit sales:
March	$36,000			$36,000
April	$8000	$32,000		$40,000
May		$8,800	$35,200	$44,000
June			$10,400	$10,400

Total Cash Collections	$104,000	$106,800	$123,600	$334,000

Working notes:

Cash sales are 60% of Total sales.

April: ($100,000×60%)=$60,000

May: ($110,000×60%)=$66,000

June: ($130,000×60%)=$78,000

Credit sales are equal to 40% of Total sales.

Month	Particulars	Amount

March	Accounts receivable	$36,000

April	Credit sales ($100,000×40%)	$40,000
	Received in April ($40,000×20%)	8,000
	Received in May ($40,000×80%)	32,000

May	Credit sales ($110,000×40%)	$44,000
	Received in April ($44,000×20%)	$8,800
	Received in May ($44,000×80%)	$35,200

June	Credit sales ($130,000×40%)	$52,000
	Received in April ($52,000×20%)	$10,400

Answer 13

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

Answer 14

2

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the budgeted merchandise purchase for April, May, and June.

Answer 15

2

Expert Solution

Answer to Problem 8.27P

The budgeted merchandise purchase for April is $63,000; May is $72,000; and June is $81,000.

Answer 16

2

Expert Solution

Answer 17

2

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Particulars	April	May	June	Total

Cost of Goods Sold	$60,000	$66,000	$78,000	$204,000
Add: Expected ending merchandise inventory	$43,000	$49,000	$52,000	$114,000

Total requirement	$103,000	$115,000	$130,000	$348,000
Less: Inventory at beginning	$40,000	$43,000	$49,000	$132,000

Required Purchase	$63,000	$72,000	$81,000	$216,00

Working notes:

Cost of goods sold:

April: ($66,000×50%)+$10,000=$43,000

May: ($78,000×50%)+$10,000=$49,000

June: ($140,000×60%×50%)+$10,000=$52,000

Inventory at beginning:

April- Inventory balance at end of March - $40,000

May- Inventory balance at end of April - $43,000

June- Inventory balance at end of May - $49,000

Answer 20

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

Answer 21

3

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Compute the expected cash disbursements for merchandise purchases for April, May, and June.

Answer 22

3

Expert Solution

Answer to Problem 8.27P

The expected cash disbursement for merchandise purchases for April is $57,600: May $63,900; and June is $72,800.

Answer 23

3

Expert Solution

Answer 24

3

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Particulars	April	May	June	Total

Cash Purchase	$6,300	$7,200	$8,180	$21,600
Credit Purchase	$51,300	$56,700	$64,800	$172,800

Total Cash Disbursements	$57,600	$63,900	$72,800	$194,400

Working notes:

Cash purchase: 10% of merchandise inventory purchases. Cash purchases would be 10% of required purchases.

April: ($63,000×10%)=$6,300

May: ($72,000×10%)=$7,200

June: ($81,000×10%)=$8,100

90% of purchases are credit purchase in the month subsequent to the purchase.

Month	Particulars	Amount

March	Accounts payable	$51,300
April	90% of required April Purchases	$56,700
May	90% of required May purchases	$64,800

Answer 27

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700

Answer 28

4

To determine

Introduction: Budget means the estimation made for the usage of money to decide the amount that executor will need to execute the plan. The budgeting process refers to the process in which future business activity is planned for preparing the way of performing goals by mapping the formal plan.

Prepare a budgeted balance sheet at June 30.

Answer 29

4

Expert Solution

Answer to Problem 8.27P

Budgeted balance sheet shows assets and liability of $334,600

Answer 30

4

Expert Solution

Answer 31

4

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Particulars	Amount

Assets:

Cash	$144,000
Accounts Receivable	$41,600
Inventory	$52,000
Building	$97,000

Total Assets	$334,600

Liabilities and Equity Shareholders:

Accounts Payable	$72,900
Common stock	$70,000
Retained Earnings	$191,700

Total Liabilities	$334,600

Working notes:

Cash

Particulars	Amount

Opening balance	$55,000
Add: Total Cash Collections	$334,400
Less: Selling and Administrative expenses	($51,000)

Cash Ending balance	$144,000

Accounts receivable

$130,000×40%×80%=$41,600

Inventory

($140,000×60%×50%)+$10,000=$52,000

Building

Particulars	Amount

Cost	$100,000
Less: Depreciation ($1,000×3)	($3,000)
Net Value	$97,000

Accounts payable

Particulars	Amount

Total Purchase for June	$81,000
Less: Cash Purchase	($8,100)
Accounts Payable	$72,900

Retained earnings

Particulars	Amount

Beginning Balance	$109,700
Add: Income for April	25,000
Income for May	27,500
Income for June	32,500

Less: Depreciation for April	1,000
Depreciation for May	1,000
Depreciation for June	1,000

Ending Balance	$191,700