1A: budgeted sales for July 1B: budgeted merchandise purchases for July 1C: budg

Question

1A: budgeted sales for July 1B: budgeted merchandise purchases for July 1C: budgeted cost of good sold for July 1D: budgeted net operating income for July Help Save&Exit; Submit Check my wors Wolfpack Company is a merchandising company that is preparing a budget for the month of July. it has provided the following information: Balance Cash ecounts receivable Inventory Buildings and equipment, net of depreciation213 000 Total assets Liabilities and Stockholders' Equity Nocounts payable s 79,200 40,200 401,00o 56,000 Retained earninga Total liabilities and stockholders equity s 401,000 Budgeting Assumptions: 1 All sales are on account. Thity rcent of the credit sales are collected in the month of sale and the remaining 70% are creait sales are accounts receivable at June 30 will be collected in July collected in the month subsequent to the sale. The the purchase and the remaining 80% is paid in the month after the purchase. tnyerarndise nventory purchases are paid in the month of paid in full in the month the 2. All merchandise purchases are on account Twenty percent of 3. The budgeted inventory balance at July 31 is $25.700 4. Depreciation expense is $4,260 per month. All other selling and administrative expenses are expense is incurred. The company's cash budget for July shows expected cash collections of $106.100, expected cash disbursements for merchandise purchases of $68300, and cash paid for selling and administrative expenses of $20740 S. Required: 1 For the month of July, calculate the folowing a Budgeted sales b. Budgeted merchandise purchases Next Prev 2 of 2 MacBook Air 44 1 4

Explanation / Answer

Note: As per rule, I am answering first 4 parts of this question.

(1A). Budgeted sales for July = $125000

Explanation;

Expected collection in July

$106100

Less: Accounts receivable (June)

($68600)

Cash collected out of July sales

$37500

Total sales of July ($37500 / 0.30)

$125000

(1B). Budgeted merchandise purchases for July = $60500

Explanation;

Expected cash disbursed for mercandise in July

$68100

Less: Accounts payable (June)

($56000)

Cash disbursed for July’s purchases

$12100

Total merchandise purchases for July ($12100 / 0.20)

$60500

(1C). Budgeted cost of good sold for July = $75000

Explanation;

Beginning inventory

$40200

Add: Purchases

$60500

Less: Ending inventory

($25700)

Budgeted cost of good sold for July

$75000

(1D). Budgeted net operating income for July = $25000

Explanation;

Sales

$125000

Less: Cost of goods sold

($75000)

Gross profit

$50000

Less: Selling & Administrative expenses

($20740)

Less: Depreciation

($4260)

Budgeted net operating income

$25000

Expected collection in July

$106100

Less: Accounts receivable (June)

($68600)

Cash collected out of July sales

$37500

Total sales of July ($37500 / 0.30)

$125000

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