ATC7-2 Group Assignment Master budget and pro forma statements The following trial balance was drawn from the records of Havel Company as of October 1, 2018: Cash $ 16,000 Accounts receivable 60,000 Inventory 40,000 Store equipment 200,000 Accumulated depreciation $ 76,800 Accounts payable 72,000 Line of credit loan 100,000 Common stock 50,000 Retained earnings 17,200 Totals $316,000 $316,000 Required a. Divide the class into groups, each with four or five students. Organize the groups into three sections. Assign Task 1 to the first section, Task 2 to the second section, and Task 3 to the third section. Group Tasks 1. Based on the following information, prepare a sales budget and a schedule of cash receipts for October, November, and December. Sales for October are expected to be $180,000, consisting of $40,000 in cash and $140,000 on credit. The company expects sales to increase at the rate of 10 percent per month. All accounts receivable are collected in the month following the sale. 2. Based on the following information, prepare a purchases budget and a schedule of cash payments for inventory purchases for October, November, and December. The inventory balance as of October 1 was $40,000. Cost of goods sold for October is expected to be $72,000. Cost of goods sold is expected to increase by 10 percent per month. The company expects to maintain a minimum ending inventory equal to 20 percent of the current month cost of goods sold. Seventy-five percent of accounts payable is paid in the month that the purchase occurs; the remaining 25 percent is paid in the following month. 3. Based on the following selling and administrative expenses budgeted for October, prepare a selling and administrative expenses budget for October, November, and December. Sales commissions (10% increase per month) $ 7,200 Supplies expense (10% Increase per month) 1,800 Utilities (fixed) 2,200 Depreciation on store equipment (fixed) 1,600 Salary expense (fixed) 34,000 Rent (fixed) 6,000 Miscellaneous (fixed) 1,000 Cash payments for sales commissions and utilities are made in the month following the one in which the expense is incurred. Supplies and other operating expenses are paid in cash in the month in which they are incurred. b. Select a representative from each section. Have the representatives supply the missing information in the following pro forma income statement and balance sheet for the fourth quarter of 2018. The statements are prepared as of December 31, 2018. Income Statement Sales revenue $ ? Cost of goods sold ? Gross margin 357,480 Operating expenses ? Operating income 193,290 Interest expense (2,530) Net income $190,760 Balance Sheet Assets Cash $ 9,760 Accounts receivable ? Inventory ? Store equipment $200,000 Accumulated depreciation store equipment Book value of equipment 118,400 Total assets $314,984 Liabilities Accounts payable ? Utilities payable ? Sales commissions payable ? Line of credit 23,936 Equity Common stock 50,000 Retained earnings ? Total liabilities and equity $314,984 c. Indicate whether Havel will need to borrow money during October.

Relevant data from Picta Company’s operating budgets are presented below. The company’s financial year ends on 30 June. Quarter 1Quarter 2Sales$248,470$251,539Direct material purchases120,295128,832Direct labor76,55374,289Manufacturing overhead26,00024,400Selling and administration expenses33,50033,500Depreciation included in selling and administration expenses 2,000 2,500 Collection from customers230,524220,116Cash payments for purchases114,345118,346 Additional data:Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank. Required: a) Use this information to prepare a cash budget for the first two quarters of the year. bi) Briefly comment on Picta Company’s expected cashflow position in the first two quarters of the year.

Budgeted Income Statement and Balance SheetAs a preliminary to requesting budget estimates of sales, costs, and expenses for the fiscal year beginning January 1, 20Y9, the following tentative trial balance as of December 31, 20Y8, is prepared by the Accounting Department of Mesa Publishing Co.: Cash$ 26,000Accounts Receivable23,800Finished Goods16,900Work in Process4,200Materials6,400Prepaid Expenses600Plant and Equipment82,000Accumulated Depreciation—Plant and Equipment$ 32,000Accounts Payable14,800Common Stock, $1.50 par30,000Retained Earnings83,100$159,900$159,900Factory output and sales for 20Y9 are expected to total 3,800 units of product, which are to be sold at $120 per unit. The quantities and costs of the inventories at December 31, 20Y9, are expected to remain unchanged from the balances at the beginning of the year.Budget estimates of manufacturing costs and operating expenses for the year are summarized as follows:Estimated Costs and ExpensesFixed(Total for…

The following information is available from previously prepared budgets for the month of January January Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory Equipment Accumulated Depreciation Equipment 11,000 Accounts Payable 51,000 Common Stock 47,000 Previous period's ending balance in Retained Earnings is $104,000. No dividends are expected to be declared or paid. A. $198,000 B. $451,000 C. $302,000 D. $349,000 $105,000 149,000 12,000 17,000 128,000 CITE

Prepare a cost of goods sold budget for the Crest Hills Manufacturing Co. for the year ended December 31, 2016, from the following estimates. Inventories of production units: Direct materials purchased during the year, 854,000; beginning inventory of direct materials, 31,000; and ending inventory of direct materials, 26,000. Totals from other budgets included:

assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings Debits. $ 58,000 Credits 214,400 60,450 368,000 $ 90,525 500,000 110,325 $ 700,850 $ 700,850 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March April $ 268,000 $ 403,000 $ 600,000 $ 315,000 $ 211,000 c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $33,000 per month: advertising, $63,000 per month;…

The following information is available from various budgets for the current period: Amount Budget Cash budget Account Cash Accounts Receivable Prepaid Insurance Equipment Accumulated Depreciation - Equipment Schedule of cash receipts from customers Inventory, purchases, and cost of goods sold budget Selling and administrative expense budget Capital expenditures budget OA. $173,000 OB. $164,000 OC. $159,000 O D. $162,000 $28,000 Merchandise Inventory Insurance Expense (expense incurred during the period) Equipment Depreciation Expense Equipment (expense incurred during the period) Selling and administrative expense budget 2,000 The following balances are available from the balance sheet at the end of the previous year: $5,000 28,000 7,000 What would be the amount of total assets on the budgeted balance sheet? 35,000 41,000 2,000 36,000

Problem 07-4A Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019. ZIGBY MANUFACTURINGEstimated Balance SheetMarch 31, 2019 Assets Cash $ 54,000 Accounts receivable 354,375 Raw materials inventory 100,495 Finished goods inventory 333,000 Total current assets 841,870 Equipment 628,000 Accumulated depreciation (164,000 ) Equipment, net 464,000 Total assets $ 1,305,870 Liabilities and Equity Accounts payable $ 212,195 Short-term notes payable 26,000 Total current liabilities 238,195 Long-term note payable 514,000 Total liabilities 752,195 Common stock 349,000 Retained earnings 204,675 Total stockholders’ equity 553,675 Total liabilities and equity $ 1,305,870 To prepare a master budget for April, May, and June…

Graded HW i Fixed Budget For Year Ended December 31 $ Sales 3,171,000 Costs Direct materials 996,600 Direct labor 226,500 Sales staff commissions 60,400 Depreciation-Machinery 295,000 Supervisory salaries 203,000 Shipping 226,500 Sales staff salaries (fixed annual 250,000 amount) Administrative salaries 556,450 Depreciation-Office equipment 198,000 Income $ 158,550 Saved Required: 1&2. Prepare flexible budgets at sales volumes of 14,100 and 16,100 units. 3. The company's business conditions are improving. One possible result is a sales volume of 18,100 units. Prepare a simple budgeted income statement if 18,100 units are sold. Complete this question by entering your answers in the tabs below. Req 1 Req 3 and 2 Prepare flexible budgets at sales volumes of 14,100 and 16,100 units. Sales Variable costs Direct materials Direct labor Sales staff commissions Shipping Total variable costs Contribution margin Fixed costs PHOENIX COMPANY Flexible Budgets For Year Ended December 31 Flexible…

Required Information TES-417 Inc. is a retaller. Its accountants are preparing the company's 2nd quarter master budget. The company has the following balance sheet as of March 31. TES-417 Inc. Balance Sheet March 31 Assets Accounts receivable Inventory 129,880 52, see 217,000 Plant and equipment, net of depreciation. Total assets $ 480.500 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings 55, see Total liabilities and stockholders' equity $ 480.500 TES-417 accountants have made the following estimates: 1. Sales for April, May, June, and July will be $280,000, $300,000, $290,000, and $310,000, respectively. 2. All sales are on credit. Each month's credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at March 31 will be collected in April. 3. Each month's ending inventory must equal 25% of next month's cost of goods sold. The cost of goods sold is 75% of sales. The company pays for…

Relevant data from the Poster Company’s operating budgets are: Quarter 1 Quarter 2 Sales $208,470 $211,538 Direct material purchases 115,295 120,833 Direct labor 75,210 73,299 Manufacturing overhead 25,400 25,200 Selling and administrative expenses 33,500 33,600 Depreciation included in selling and administrative 1,500 1,100 Collections from customers 215,393 240,154 Cash payments for purchases 114,290 119,253 Additional data:Capital assets were sold in January for $9,000 and $4,400 in May.Dividends of $4,500 were paid in February. The beginning cash balance was $60,360 and a required minimum cash balance is $58,000. Use this information to prepare a cash budget for the first two quarters of the year: If an amount box does not require an entry, leave it blank. The Poster Company Cash Budget For the First Two Quarters Quarter 1 Quarter 2 $fill in the blank 2 $fill in the blank 3 Add: Cash Receipts fill in the blank 5 fill in the blank…

Please answer the first 3 parts - req 1, 2 and 3 according to the images attached Problem 8-29 (Algo) Completing a Master Budget [LO8-2, LO8-4, LO8-7, LO8-8, LO8-9, LO8-10] The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash $ 7,300 Accounts receivable $ 19,200 Inventory $ 38,400 Building and equipment, net $ 124,800 Accounts payable $ 22,800 Common stock $ 150,000 Retained earnings $ 16,900 The gross margin is 25% of sales. Actual and budgeted sales data: March (actual) $ 48,000 April $ 64,000 May $ 69,000 June $ 94,000 July $ 45,000 Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold. One-half of a month’s inventory…

7.3 Shown below are the totals from 2018 period budgets. Revenue budget Materials usage from production budget Labor cost budget Manufacturing overhead budget General and administrative budget Capital expenditure budget P100,000 15,000 20,000 20,000 30,000 20,000 32 How Work-in-Progress Inventories: Beginning of 2018 End of 2018 ndilet b rsM x) 1E valM 10,000 lsa 5,000 PLS Finished Goods Iventory: Beginning of 2018 End of 2018 Pla 15,000 10,000 Tax Rate 40% hen dees20 oldibsllonU Instructions: nongt od Prepare a forecasted Income Statement for the year. bas sldigilgon

Solution Summary: The author explains how to prepare the cash receipts and sales budget for October, November, and December.

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Chapter 14 Solutions

Cash	$ 16,000
Accounts receivable	60,000
Inventory	40,000
Store equipment	200,000
Accumulated depreciation		$ 76,800
Accounts payable		72,000
Line of credit loan		100,000
Common stock		50,000
Retained earnings		17,200
Totals	$316,000	$316,000

Sales commissions (10% increase per month)	$ 7,200
Supplies expense (10% Increase per month)	1,800
Utilities (fixed)	2,200
Depreciation on store equipment (fixed)	1,600
Salary expense (fixed)	34,000
Rent (fixed)	6,000
Miscellaneous (fixed)	1,000

Income Statement
Sales revenue		$ ?
Cost of goods sold		?
Gross margin		357,480
Operating expenses		?
Operating income		193,290
Interest expense		(2,530)
Net income		$190,760
Balance Sheet
Assets
Cash		$ 9,760
Accounts receivable		?
Inventory		?
Store equipment	$200,000
Accumulated depreciation store equipment
Book value of equipment		118,400
Total assets		$314,984
Liabilities
Accounts payable		?
Utilities payable		?
Sales commissions payable		?
Line of credit		23,936
Equity
Common stock		50,000
Retained earnings		?
Total liabilities and equity		$314,984