SHOW STEPS PLEASE Wolfpack Company is a merchandising company that is preparing

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SHOW STEPS PLEASE

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information Wolfpack Company Balance Sheet June 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets $ 89,800 54,200 48,000 230,000 $ 422,000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 35,000 100,000 287,000 422,000 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 $24,500 4. Depreciation expense is $4,600 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred 5. The company's cash budget for July shows expected cash collections of $90,200, expected cash disbursements for merchandise purchases of $44,700, and cash paid for selling and administrative expenses of $19,400 Required 1. For the month of July, calculate the following a. Budgeted sales b. Budgeted merchandise purchases c. Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31 Complete this question by entering your answers in the tabs below Required 1A Required 1B Required 1C Required 1D Required 2 Calculate the budgeted sales for month of July. Budgeted sales for July

Explanation / Answer

Statement Showing Budgeted sales for July Detail Amount Expected cash Collection in July $90,200 Account receivable as on June30 -$54,200 Cash Collection for July Sales $36,000 Total Budgeted Sales in July $120,000 ($36000/30%) Statement Showing Budgeted Merchandised Purchase for July Detail Amount Expected cash disbursement in July for Merchandised Purchase $44,700 Account payable as on June30 -$35,000 Cash disbursement for July Purchase $9,700 Total Merchandised Purchsed in July $48,500 ($9700/20%) Statement Showing Budgeted Cost of Goods Sold for July Detail Amount Beginning Bal of Inventory $48,000 Inventory Purchased in July $48,500 Closing Bal of Inventory as on 31 Jul -$24,500 Cost of Goods Sold for July $72,000 Statement Showing Budgeted Net Operating Income for July Detail Amount Sales $120,000 Less: COGS -$72,000 Gross Profit $48,000 Less: Selling & Admin -$19,400 Depreciation -$4,600 Net Operating Income $24,000 WolfPack Company Budgeted Balance sheet as on 31 July Detail Amount Asset Cash $115,900 Account Receivable ( $120000*70%) $84,000 Inventory $24,500 Net Building & Equipment($230000-4600) $225,400 Total Asset $449,800 Liabilities & Shareholder Equity Account Payable ( $48500*80%) $38,800 Retained Earning( $287000+24000) $311,000 Common Stock $100,000 Total Liabilities & Shareholder Equity $449,800 Working Note for Cash Balance as 31st July Detail Amount Opening Balance $89,800 Expected Cash Collection $90,200 Less: Expected Cash Disbursement -$44,700 Less: Selling and Admin -$19,400 Closing Cash Balance as on 31st July $115,900

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