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 8PSB

1.

To determine

To prepare: Sale budget of I Corporation.

1.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the sales budget of I Incorporation

I Incorporation
Sales Budget
Particulars January ($) February ($) March ($) Total ($)
Sales unit (A) 6,000 8,000 10,000 24,000
Selling price Per unit (B) 45 45 45 45
Total sales ( A×B ) 270,000 360,000 450,000 1,080,000
Table (1)

2.

To determine

To prepare: Purchase budget of I Corporation.

2.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the purchase budget of I Incorporation

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

3.

To determine

To prepare: Selling expense budget of I Incorporation.

3.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the selling expense budget of I Incorporation,

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

4.

To determine

To prepare: General and administrative expense budget of I Incorporation.

4.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the General and administrative expense budget of I Incorporation

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

5.

To determine

To prepare: Capital expenditure budget of I Incorporation.

5.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the capital expenditure budget of I Incorporation

Managerial Accounting, Chapter 7, Problem 8PSB , additional homework tip  4
Table (5)

6.

To determine

To prepare: Cash budget of I Incorporation.

6.

Expert Solution
Check Mark

Explanation of Solution

Statement that shows the Cash budget of I Incorporation

Managerial Accounting, Chapter 7, Problem 8PSB , additional homework tip  5
Table (6)

Working Notes:

Calculation of expected cash collection

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

7.

To determine

To prepare: Budgeted income statement for the first quarter.

7.

Expert Solution
Check Mark

Explanation of Solution

Prepare income statement.

I Incorporation
Income Statement
For three months ended March 31,2018
Particulars Amount ($) Amount ($)
Sales 1,080,000
Less: Cost of goods sold 720,000
Gross profit 360,000
Less: Operating expenses
Total selling expense 238,500
General administrative salary 45,000
Depreciation expense 21,425
Total operating expense 304,925
Earnings before taxes (A) 55,075
Less: Income tax ( A×40% ) 22,030
Net income 33,045
Table (8)

Thus, budgeted net income of I Incorporation is $33,045.

8.

To determine

To prepare: Budgeted balance sheet for the first quarter.

8.

Expert Solution
Check Mark

Explanation of Solution

Prepare balance sheet

I Incorporation
Balance sheet
For three months ended March 31,2018
Particulars Amount ($)
Assets
Cash 36,000
Account Receivables 445,500
Inventory 67,500
Total current assets 549,000
Equipment 647,875
Land 150,000
Net equipment
Total Assets 1,346,875
Liabilities and Stockholder’s Equity
Liabilities
Accounts Payable 496,500
Bank loan payable 76,800
Income tax payable 22,030
Total liabilities 595,330
Stockholder’s Equity
Common Stock 472,500
Retained earnings 279,045
Total stockholders’ equity 751,545
Total Liabilities and Stockholder’s equity 1,346,875
Table (9)

Working note:

Calculation of retained earnings,

    Closing retained earning=Opening retained earning+Net income =$246,000+$33,045 =$279,045

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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What is Budgeting? | Budgetary control | Advantages & Limitations of Budgeting; Author: Educationleaves;https://www.youtube.com/watch?v=INnPo0QPXf4;License: Standard youtube license