ation.com/flow/connect.html Some updates could not be installe 4 A. Exercise 8-1

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ation.com/flow/connect.html Some updates could not be installe 4 A. Exercise 8-18 Cash Flows; Budgeted Income Statement and Balance Sheet (L08-2, Lo8-3, Lo8-9, LO8-10] 10 Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following une 30 $ 75, 800 59,000 43,400 223,000 $ 401,200 Buildings and equipment, net of depreciation Total assets $ 63,200 100,000 238,000 401,200 Accounts payable stock Total liabilities and stockholders equity Budgeting Assumptions: 1, All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase. 3. The budgeted inventory balance at July 31 is $29,200. nor month All nthar e Gitt in

Explanation / Answer

1a. Budgeted sales: $97000

b. Budgeted merchandise purchases: $44000

c. Budgeted cost of goods sold: $58200

d. Budgeted net operating income: $19400

2.

Expected cash collections in July 88100 Less: June 30 accounts receivable 59000 July sales collected 29100 Budgeted sales for July ($29100/30%) 97000

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