Managerial Accounting
Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter 7, Problem 29E

(1)

To determine

To prepare: Merchandise purchase budget for July, August, September, October.

(1)

Expert Solution
Check Mark

Explanation of Solution

Merchandise Purchase Budget
Particulars June Amount ($) July Amount ($) August Amount ($) September Amount ($) October Amount ($)
Budgeted sales 350,000 290,000 320,000 275,000 265,000
Next month’s cost of goods sold (Working note 1) 245,000 203,000 224,000 192,500 185,500
Ending inventory (Working note 2) 49,000 40,600 44,800 38,500 37,100
Add: Cost of goods sold 245,000 203,000 224,000 192,500
Required inventory 285,600 247,800 262,500 229,600
Less: Opening inventory 49,000 40,600 44,800 38,500
Inventory to be purchased 236,600 207,200 217,700 191,100
Table (1)

Working note:

Formula to calculate next month’s cost of goods sold,

    Cost of goods sold=Budgeted sales×70%
Next month’s cost of goods sold
Particulars June Amount ($) July Amount ($) August Amount ($) September Amount ($) October Amount ($)
Budgeted sales 350,000 290,000 320,000 275,000 265,000
Cost of goods sold ( Sales×70% ) 245,000 203,000 224,000 192,500 185,500
Table (2)

Working note:

Ending inventory
Particulars June Amount ($) July Amount ($) August Amount ($) September Amount ($) October Amount ($)
Next month’s cost of goods sold 245,000 203,000 224,000 192,500 185,500
Ending inventory ( Next month's  cost of goods  sold×20% ) 49,000 40,600 44,800 38,500 37,100
Table (3)

(2)

To determine

To prepare: Budgeted cash payments on account payables.

(2)

Expert Solution
Check Mark

Explanation of Solution

Budgeted Cash Payments on Account payables
Particulars September Amount ($) October Amount ($)
Payment for July purchases 35,490
Payment for August purchases 124,320 31,080
Payment for September purchases 54,425 130,620
Payment for October purchases 47,775
Total 214,225 209,475
Table (4)

(3)

To determine

To prepare: Budgeted accounts payable for September and October.

(3)

Expert Solution
Check Mark

Explanation of Solution

Budgeted cash payments on account payables
Particulars June Amount ($) July Amount ($) August Amount ($) September Amount ($)
Beginning accounts payable 0 177,450 190,890 194,355
Add: Budgeted purchases 236,600 207,200 217,700 191,100
Amount payable after purchases [ A ] 236,600 384,650 408,590 385,455
Cash disbursement
Payment for July purchases 59,1501 41,960 35,490
Payment for August purchases 51,800 124,380 31,080
Payment for September purchases 54,425 130,620
Payment for October purchases 47,725
Total Cash payments [ B ] 59,150 193,760 214,235 209,475
Ending accounts payable [ AB ] 177,450 190,890 194,355 175,980
Table (5)

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Chapter 7 Solutions

Managerial Accounting

Ch. 7 - How does budgeting help management coordinate and...Ch. 7 - Why is the sales budget so important to the...Ch. 7 - What is the selling expense budget? What is the...Ch. 7 - Prob. 9DQCh. 7 - GOOGLE Google prepares a cash budget. What is a...Ch. 7 - Prob. 11DQCh. 7 - Prob. 12DQCh. 7 - Prob. 13DQCh. 7 - Prob. 14DQCh. 7 - Coca-cola recently redesigned its bottle to reduce...Ch. 7 - Activity-based budgeting is a budget system based...Ch. 7 - Budget motivation C1 For each of the following...Ch. 7 - Budgeting benefits C1 For each of the following...Ch. 7 - Prob. 3QSCh. 7 - Prob. 4QSCh. 7 - Prob. 5QSCh. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QSCh. 7 - Prob. 11QSCh. 7 - Prob. 12QSCh. 7 - Prob. 13QSCh. 7 - Prob. 14QSCh. 7 - Prob. 15QSCh. 7 - Manufacturing: Production budget P1 Atlantic Surf...Ch. 7 - Prob. 17QSCh. 7 - Prob. 18QSCh. 7 - Prob. 19QSCh. 7 - Cash receipts, with uncollectible accounts P2 The...Ch. 7 - Cash receipts, with uncollectible accounts P2 Well...Ch. 7 - Prob. 22QSCh. 7 - Budgeted loan activity P2 Santos Co. is preparing...Ch. 7 - Prob. 24QSCh. 7 - Prob. 25QSCh. 7 - Prob. 26QSCh. 7 - Prob. 27QSCh. 7 - Prob. 28QSCh. 7 - Prob. 29QSCh. 7 - Prob. 30QSCh. 7 - Prob. 31QSCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Exercise 20-5 Manufacturing: Direct labor budget...Ch. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Prob. 25ECh. 7 - Prob. 26ECh. 7 - Prob. 27ECh. 7 - Prob. 28ECh. 7 - Prob. 29ECh. 7 - Prob. 30ECh. 7 - Prob. 31ECh. 7 - Prob. 32ECh. 7 - Prob. 33ECh. 7 - Prob. 34ECh. 7 - Prob. 35ECh. 7 - Prob. 1PSACh. 7 - Prob. 2PSACh. 7 - Prob. 3PSACh. 7 - Prob. 4PSACh. 7 - Prob. 5PSACh. 7 - Prob. 6PSACh. 7 - Prob. 7PSACh. 7 - Prob. 8PSACh. 7 - Prob. 1PSBCh. 7 - Prob. 2PSBCh. 7 - Prob. 3PSBCh. 7 - Prob. 4PSBCh. 7 - Prob. 5PSBCh. 7 - Prob. 6PSBCh. 7 - Prob. 7PSBCh. 7 - Prob. 8PSBCh. 7 - Prob. 7SPCh. 7 - Prob. 1AACh. 7 - Prob. 2AACh. 7 - Prob. 3AACh. 7 - ETHICS CHALLENGE C1 BTN 20-3 Both the budget...Ch. 7 - Prob. 2BTNCh. 7 - Prob. 3BTNCh. 7 - Prob. 4BTNCh. 7 - Prob. 5BTNCh. 7 - Prob. 6BTN
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