Managerial Accounting
Managerial Accounting
6th Edition
ISBN: 9781259726972
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 7, Problem 8PSA

1.

To determine

To prepare: Sale budget of D Company.

1.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the sales budget of D Company

D Company
Sales Budget
Particulars January ($) February ($) March ($) Total ($)
Sales unit (A) 7,000 9,000 11,000 27,000
Selling price Per unit (B) 55 55 55 55
Total sales ( A×B ) 385,000 495,000 605,000 1,485,000
Table (1)

2.

To determine

To prepare: Purchase budget of D Company.

2.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the purchase budget of D Company

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  1
Table (2)

3.

To determine

To prepare: Selling expense budget of D Company.

3.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the selling expense budget of D Company,

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  2
Table (3)

4.

To determine

To prepare: General and administrative expense budget of D Company.

4.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the General and administrative expense budget of D Company

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  3
Table (4)

Working notes:

Statement that shows the depreciation expense calculation

Particulars January ($) February ($) March ($)
Equipment in Beginning 540,000 576,000 672,000
Add: Purchase of Equipment 36,000 96,000 28,800
Less: equipment at the end 576,000 672,000 700,800
Depreciation 6,000 7,000 7,300
Table (5)

5.

To determine

To prepare: Capital expenditure budget of D Company.

5.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the capital expenditure budget of D Company

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  4
Table (6)

6.

To determine

To prepare: Cash budget of D Company.

6.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the Cash budget of D Company

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  5
Table (7)

Working notes:

Calculation of expected cash collection

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  6
Table (8)

Calculation of cash payment from purchase,

Managerial Accounting, Chapter 7, Problem 8PSA , additional homework tip  7
Table (9)

7.

To determine

To prepare: Budgeted income statement for the first quarter.

7.

Expert Solution
Check Mark

Explanation of Solution

Prepare income statement.

D Company
Income Statement
For three months ended March 31,2018
Particulars Amount ($) Amount ($)
Sales 1,485,000
Less: Cost of goods sold ( 27,000 units×$30 ) 810,000
Gross profit 675,000
Less: Operating expenses
Total selling expense 312,000
General administrative salary 62,300
Interest on bank loan 150
Total operating expense 374,450
Earnings before taxes (A) 300,550
Less: Income tax ( A×40% ) 120,220
Net income 180,330
Table (10)

Thus, budgeted net income of D Company is $180,330.

8.

To determine

To prepare: Budgeted balance sheet for the first quarter.

8.

Expert Solution
Check Mark

Explanation of Solution

Prepare balance sheet

D Company
Balance sheet
For three months ended March 31,2018
Particulars Amount ($)
Assets
Cash 233,400
Account Receivables 602,250
Inventory 60,000
Total current assets 895,650
Equipment 523,000
Land 150,000
Net equipment
Total Assets 1,568,650
Liabilities and Stockholder’s Equity
Liabilities
Accounts Payable 549,600
Income tax payable 120,220
Total liabilities 669,820
Stockholder’s Equity
Common Stock 472,500
Retained earnings 426,330
Total stockholders’ equity 898,830
Total Liabilities and Stockholder’s equity 1,568,650
Table (11)

Working Notes:

Calculation of retained earnings,

    Closing retained earning=Opening retained earning+Net income =$246,000+$180,330 =$426,330

Hence, the total of the balance sheet of the D Company as on March 31, 2018 is of $1,568,650.

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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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