Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Chapter 20, Problem 4PSA

1.

To determine

To prepare:

The sales budget of Z manufacturing.

1.

Expert Solution
Check Mark

Explanation of Solution

Prepare the sales budget as shown below.

Sales Budget
Particulars April ($) May ($) June ($) Total ($)
Sales unit (A) 20,500 19,500 20,000 60,000
Selling price per unit (B) 23.85 23.85 23.85 23.85
Total sales
(A×B)
488,925 465,075 477,000 1,431,000

Table - 1

2.

To determine

To prepare:

The production budget of Z manufacturing.

2.

Expert Solution
Check Mark

Explanation of Solution

Prepare the production budget as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  1

Table - 2

3.

To determine

To prepare:

The raw materials budget of Z manufacturing.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare the raw material budget of Z manufacturing as shown below

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  2

Table - 3

4.

To determine

To prepare:

The direct labor budget of Z manufacturing.

4.

Expert Solution
Check Mark

Explanation of Solution

Prepare the direct labor budget of Z manufacturing as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  3

Table - 4

5.

To determine

To prepare:

The factory overhead budget of Z manufacturing.

5.

Expert Solution
Check Mark

Explanation of Solution

Prepare the factory overhead budget of Z manufacturing as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  4

Table - 5

6.

To determine

To prepare:

The selling expense budget of Z manufacturing.

6.

Expert Solution
Check Mark

Explanation of Solution

Prepare the selling expense budget of Z manufacturing as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  5

Table - 6

7.

To determine

To prepare:

The general and administrative expense budget of Z manufacturing.

7.

Expert Solution
Check Mark

Explanation of Solution

Prepare the general and administrative expense budget of Z manufacturing as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  6

Table - 7

8.

To determine

To prepare:

The cash budget of Z manufacturing.

8.

Expert Solution
Check Mark

Explanation of Solution

Prepare the cash budget of Z manufacturing as shown below.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  7

Table - 8

Working notes:

Calculate the cash receipts.

Financial and Managerial Accounting (Looseleaf) (Custom Package), Chapter 20, Problem 4PSA , additional homework tip  8

Table - 9

9.

To determine

To prepare:

The budgeted income statement for the second quarter.

9.

Expert Solution
Check Mark

Explanation of Solution

Prepare the budgeted income statement as shown below.

Z. Manufacturing
Income Statement
For three months ended June 30, 2015
Particulars Amount ($) Amount ($)
Sales   1,431,000
Less: Cost of goods sold   1,191,000
Gross profit   240,000
Less: Operating expenses    
Sales commission 114,480  
Sales salaries 9000  
General administrative salary 36000  
Total operating expense   159,480
Earnings before interest and taxes   80,520
Less: Interest on long term notes   13,500
Interest on short term note   120
Earnings before taxes (A)   66,900
Less: Income tax (A×35%)   23,415
Net income   43,485

Table - 10

Hence, the budgeted net income of Z manufacturing is $43,485.

10.

To determine

To prepare:

The budgeted balance sheet for the second quarter.

10.

Expert Solution
Check Mark

Explanation of Solution

Prepare the budgeted balance sheet as shown below.

Balance sheet
For three months ended June 30, 2015
Particulars   Amount ($)
Assets:    
Cash 40,000  
Account Receivables 333,900  
Raw material inventory 80,000  
Finished goods inventory 325,540  
Total current assets   779,440
Equipment 730,000  
Less: Accumulated depreciation 210,000  
Net equipment   50,000
Total Assets   1,299,440
Liabilities and Stockholder’s Equity    
Liabilities    
Accounts Payable 182,000  
Bank loan payable 16,752  
Income tax payable 23,415  
Total current liability   222,167
Long term payables   500,000
Total liabilities    
Stockholder’s equity    
Common Stock 335,000  
Retained earnings 242,273  
Total stockholders’ equity   577,273
Total Liabilities and Stockholder’s equity   1,299,440

Table - 11

Working notes:

Calculate the retained earnings

Closing retained earning=Opening retained earning+Net incomeDividend=$208,788+$43,485$10,000=$242,273

Conclusion

Hence, the total amount appearing in the balance sheet of Z Manufacturing as on June 30, 2015 is $1,299,440.

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Chapter 20 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 20 - How does budgeting help management coordinate and...Ch. 20 - Why is the sales budget so important to the...Ch. 20 - What is the selling expense budget? What is the...Ch. 20 - Budgeting promotes good decision making by...Ch. 20 - GOOGLE Google prepares a cash budget. What is a...Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 1QSCh. 20 - Prob. 2QSCh. 20 - Prob. 3QSCh. 20 - Prob. 4QSCh. 20 - Prob. 5QSCh. 20 - Prob. 6QSCh. 20 - Prob. 7QSCh. 20 - Prob. 8QSCh. 20 - Prob. 9QSCh. 20 - Prob. 10QSCh. 20 - Prob. 11QSCh. 20 - Prob. 12QSCh. 20 - Prob. 13QSCh. 20 - Prob. 14QSCh. 20 - Prob. 15QSCh. 20 - Manufacturing: Production budget P1 Atlantic Surf...Ch. 20 - Prob. 17QSCh. 20 - Prob. 18QSCh. 20 - Prob. 19QSCh. 20 - Cash receipts, with uncollectible accounts P2 The...Ch. 20 - Cash receipts, with uncollectible accounts P2 Well...Ch. 20 - Prob. 22QSCh. 20 - Prob. 23QSCh. 20 - Prob. 24QSCh. 20 - Prob. 25QSCh. 20 - Prob. 26QSCh. 20 - Prob. 27QSCh. 20 - Prob. 28QSCh. 20 - Prob. 29QSCh. 20 - Prob. 30QSCh. 20 - Prob. 31QSCh. 20 - Prob. 32QSCh. 20 - Prob. 1ECh. 20 - Prob. 2ECh. 20 - Prob. 3ECh. 20 - Prob. 4ECh. 20 - Exercise 20-5 Manufacturing: Direct labor budget...Ch. 20 - Prob. 6ECh. 20 - Prob. 7ECh. 20 - Prob. 8ECh. 20 - Prob. 9ECh. 20 - Prob. 10ECh. 20 - Prob. 11ECh. 20 - Prob. 12ECh. 20 - Prob. 13ECh. 20 - Prob. 14ECh. 20 - Prob. 15ECh. 20 - Prob. 16ECh. 20 - Prob. 17ECh. 20 - Prob. 18ECh. 20 - Prob. 19ECh. 20 - Prob. 20ECh. 20 - Prob. 21ECh. 20 - Prob. 22ECh. 20 - Prob. 23ECh. 20 - Prob. 24ECh. 20 - Prob. 25ECh. 20 - Prob. 26ECh. 20 - Prob. 27ECh. 20 - Prob. 28ECh. 20 - Prob. 29ECh. 20 - Prob. 30ECh. 20 - Prob. 31ECh. 20 - Prob. 32ECh. 20 - Prob. 33ECh. 20 - Prob. 34ECh. 20 - Prob. 1PSACh. 20 - Prob. 2PSACh. 20 - Prob. 3PSACh. 20 - Prob. 4PSACh. 20 - Prob. 5PSACh. 20 - Prob. 6PSACh. 20 - Prob. 7PSACh. 20 - Prob. 8PSACh. 20 - Prob. 1PSBCh. 20 - Prob. 2PSBCh. 20 - Prob. 3PSBCh. 20 - Prob. 4PSBCh. 20 - Prob. 5PSBCh. 20 - Prob. 6PSBCh. 20 - Prob. 7PSBCh. 20 - Prob. 8PSBCh. 20 - Prob. 20SPCh. 20 - Prob. 1BTNCh. 20 - Prob. 2BTNCh. 20 - ETHICS CHALLENGE C1 BTN 20-3 Both the budget...Ch. 20 - Prob. 4BTNCh. 20 - Prob. 5BTNCh. 20 - Prob. 6BTNCh. 20 - Prob. 7BTNCh. 20 - Prob. 8BTNCh. 20 - Prob. 9BTN
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