Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Chapter 9, Problem 9.31AE
1.
To determine
To prepare: The sales budget for all four months, showing the breakdown of cash and credit sales.
2.
To determine
To prepare: The cash collections budget for December and January.
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goods sold computations.
2. Prepare a combined cash budget similar to exhibits in the chapter. If no financing ac-
P9-61A Cash budgets (Learning Objective 3)
and cash disbursements:
are
as follows:
Budgeted Sales Revenue
$62,000
January
$70,000
February.
b. Actual purchases of direct materials in December were $24,500. The companye
purchases of direct materials in January are budgeted to be $24,000 and $26.000 i
February. All purchases are paid 40% in the month of purchase and 60% the follow
month.
c. Salaries and sales commissions are also paid half in the month earned and half the
next month. Actual salaries were $8,000 in December. Budgeted salaries in Janu-
ary are $9,000 and February budgeted salaries are $10,500. Sales commissions each
month are 8% of that month's sales.
d. Rent expense is $3,500 per month.
e. Depreciation is $2,100 per month.
f. Estimated income tax payments are made at the end of January. The estimated tax
payment is projected to be $12,500.
g.…
ing price of $26 per case. The following information relates to the budget for Main Street
a flexible budget performance report (Learning Objective 5)
Main Street Muffins sells its muffins to restaurants and coffee houses for an average sell-
Muffins for this year (all figures are annual totals unless otherwise noted):
Performance Evaluation
629
E10-26A Prepare
Budgeted sales in cases
9,100 cases
Packaging cost per case.
%24
Shipping expense per case
Sales commission expense.
2
5% of sales price
Salaries expense..
$6,500
Office rent
$3,900
Depreciation.
$2,500
Insurance expense...
$1,800
$ 900
Office supplies expense.
During the year, Main Street Muffins actually sold 9,500 cases, resulting in total sales rev-
enue of $255,200. Actual expenses (in total) from this year are as follows:
Packaging cost.
$ 10,600
$ 19,500
$ 12,760
$ 7,300
Shipping expense..
Sales commission expense.
Salaries expense...
$ 3,900
$ 2,500
$ 1,600
Office rent
Depreciation.
Insurance expense..
$ 1,600
Office…
(Learning Objective 5: Use the COGS model to make management decisions)Spicer Industries prepares budgets to help manage the company. Spicer is budgeting forthe fiscal year ended January 31, 2018. During the preceding year ended January 31, 2017,sales totaled $9,700 million and cost of goods sold was $6,400 million. At January 31, 2017,inventory was $1,500 million. During the upcoming 2018 year, suppose Spicer expects costof goods sold to increase by 12%. The company budgets next year’s ending inventory at$1,800 million.Requirement1. One of the most important decisions a manager makes is how much inventory to buy. Howmuch inventory should Spicer purchase during the upcoming year to reach its budget?
Chapter 9 Solutions
Managerial Accounting (5th Edition)
Ch. 9 - (Learning Objective 1) Which term describes the...Ch. 9 - (Learning Objective 1) Benefits of budgeting...Ch. 9 - Prob. 3QCCh. 9 - Prob. 4QCCh. 9 - Prob. 5QCCh. 9 - Prob. 6QCCh. 9 - Prob. 7QCCh. 9 - Prob. 8QCCh. 9 - Prob. 9QCCh. 9 - Prob. 10QC
Ch. 9 - Short Exercises S9-1 Order of preparation and...Ch. 9 - Explain why companies use zero-based budgeting...Ch. 9 - Understanding key terms and definitions (Learning...Ch. 9 - Sales Budget (Learning Objective 2) Jefferson...Ch. 9 - Production budget (Learning Objective 2) Nichols...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Prob. 9.7SECh. 9 - Prob. 9.8SECh. 9 - Prob. 9.9SECh. 9 - Prob. 9.10SECh. 9 - Prob. 9.11SECh. 9 - Cash payments budget (Learning Objective 3) Finley...Ch. 9 - Cash budget (Learning Objective 3) SaveCo...Ch. 9 - Prob. 9.14SECh. 9 - Prob. 9.15SECh. 9 - Identify ethical standards violated (Learning...Ch. 9 - Prob. 9.17AECh. 9 - Sales budget for a retail organization (Learning...Ch. 9 - Prob. 9.19AECh. 9 - Production budget (Learning Objective 2) Hoffman...Ch. 9 - Direct materials budget (Learning Objective 2)...Ch. 9 - Production and direct materials budgets (Learning...Ch. 9 - Direct labor budget (Learning Objective 2)...Ch. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Operating expenses budget and an income statement...Ch. 9 - Budgeted income statement (Learning Objective 2)...Ch. 9 - Prob. 9.27AECh. 9 - Cash collections budget (Learning Objective 3)...Ch. 9 - Cash payments budget (Learning Objective 3) The...Ch. 9 - Prob. 9.30AECh. 9 - Prob. 9.31AECh. 9 - Budgeted balance sheet (Learning Objective 3) Use...Ch. 9 - Prob. 9.33AECh. 9 - Prob. 9.34AECh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.37BECh. 9 - Prob. 9.38BECh. 9 - Prob. 9.39BECh. 9 - Prob. 9.40BECh. 9 - Direct materials budget (Learning Objective 2) Moe...Ch. 9 - Prob. 9.42BECh. 9 - Prob. 9.43BECh. 9 - Manufacturing overhead budget (Learning Objective...Ch. 9 - Prob. 9.45BECh. 9 - Prob. 9.46BECh. 9 - Prob. 9.47BECh. 9 - Prob. 9.48BECh. 9 - Prob. 9.49BECh. 9 - Combined cash budget (Learning Objective 3)...Ch. 9 - Sales and cash collections budgets (Learning...Ch. 9 - Prob. 9.52BECh. 9 - Prob. 9.53BECh. 9 - Prob. 9.54BECh. 9 - Prob. 9.55BECh. 9 - Prob. 9.56BECh. 9 - Comprehensive budgeting problem (Learning...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.60APCh. 9 - Cash budgets (Learning Objective 3) Elis...Ch. 9 - Prob. 9.62APCh. 9 - Cost of goods sold, inventory, and purchases...Ch. 9 - Prob. 9.64APCh. 9 - Problems Group B P9-65B Comprehensive budgeting...Ch. 9 - Cash budgets under two alternatives (Learning...Ch. 9 - Comprehensive summary problem (Learning Objectives...Ch. 9 - Prob. 9.68BPCh. 9 - Cash budgets (Learning Objective 3) Ivans...Ch. 9 - Combined cash budget and a budgeted balance sheet...Ch. 9 - Prob. 9.71BPCh. 9 - Prepare comprehensive budgets for a retailer...Ch. 9 - Prob. 9.73SCCh. 9 - Discussion Questions 1. The sales budget is the...Ch. 9 - Budgeting for a Single Product In this activity,...Ch. 9 - Ethics and budgetary slack (Learning Objectives 1,...Ch. 9 - Prob. 9.77ACT
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- Pelican Merchandising & More is a family-owned store. The business is now approaching the end of the year and is in the process of identifying its cash needs for the first quarter of the new year. You are the management accountant of the entity and have been tasked to prepare the cash budget for the business for the quarter ending Mar 31, 2022 1 Extracts from the sales and purchases budgets are as follows Month 2021 - 2022 Cash Sales $ Sales on A/C $ Cash Purchases $ Purchases on A/C $ Nov 2021 138,100 480,000 345,000 Dec 2021 156,500 600,000 25,800 380,000 Jan 2022 170,975 650,000 44,625 400,000 Feb 2022 135,740 700,000 30,400 480,000 Mar 2022 226,420 800,000 55,100 540,000 2 An analysis of the records shows that trade receivables (accounts receivable) are settled according to the following credit pattern in accordance with the credit terms 4/30, n90 55% in the month of sale 35% in the first month following the sale 8% in the second month following the sale The…arrow_forwardStudent Exercise 2: Cash Flow Budget The purpose of this exercise is provide hands-on learning in how to create a Cash Flow Forecast that predicts the month-end bank balance for every month of the year. In this scenario, you are the manager in a pharmaceutical company ABC. You are required to complete a cash flow forecast using the template provided. Your cash flow forecast will predict the bank balance at the end of each month for every month of the year The information you have at your disposal to complete this task is as follows: 1. The pharmacy has on its books four (4) major marketing events to run which will take place in March, May, August, and October. 2. The total of $285,000 of product sales will be earned in the months that the events are held. The March event will ean $65,000, and the other events in May, August and October will earn $70,000, 85,000 and $65,000 respectively. 3. Expenditure on casual salaries, travel and transport, and venue hire will occur only in the…arrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000arrow_forward
- income." Course Activity: Creating a Budget Part A Use this information to organize estimated household expenses by monthly amounts. • rent: $13,800 annually utilities: $5,400 annually ● cell phone: $534 semiannually internet: $204 semiannually • car loan: $2,274 semiannually insurance: $720 quarterly groceries: $4,332 annually • gym membership: $288 annually ● entertainment: $420 annually B I U X² X₂ ● ● ● Expense rent payment utilities cell phone internet car loan insurance Jan 10pt Feb Mar Apr M May Jun Jul Aug Sep Oct 7 of 8 ES Nov Apr 19 Dec 5:49 Save & Exitarrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000 Upon receipt of the budget, the team manager, June Jackson, has now informed you that, in keeping with industry players, the management of Pelican Merchandising have indicated an industry requirement to maintain a minimum cash balance of $185,000 each month. She has also noted that…arrow_forwardPelican Merchandising & More is a family-owned store. The business is now approaching theend of the year and is in the process of identifying its cash needs for the first quarter of the newyear. You are the management accountant of the entity and have been tasked to prepare the cashbudget for the business for the quarter ending March 31, 2022.(i) Extracts from the sales and purchases budgets are as follows:Month2021 - 2022CashSalesSalesOnAccountCashPurchasesPurchasesOnAccountNovember 2021 $138,100 $480,000 $345,000December 2021 $156,500 $600,000 $25,800 $380,000January 2022 $170,975 $650,000 $44,625 $400,000February 2022 $135,740 $700,000 $30,400 $480,000March 2022 $226,420 $800,000 $55,100 $540,000(ii) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 4/30, n90:55% in the month of sale35% in the first month following the sale8% in the second month following the…arrow_forward
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Responsibility Accounting| Responsibility Centers and Segments| US CMA Part 1| US CMA course; Master Budget and Responsibility Accounting-Intro to Managerial Accounting- Su. 2013-Prof. Gershberg; Author: Mera Skill; Rutgers Accounting Web;https://www.youtube.com/watch?v=SYQ4u1BP24g;License: Standard YouTube License, CC-BY