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ID: 2550594 • Letter: H
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Help Save&Exit; Submt k my work mode: This shows what is correct or incorrect for the work you have completed s far. It does not indicate completion Return to question Assets Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets s 78,600 102,000 40,500 279.000 $ 500,100 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity s129600 216,000 154,500 900,100 The company is in the process of preparing a budget for October and has assembled the following data: 1. Sales are budgeted at S300,000 for October and S310000 for November Of these sales, 35% will be for cash, the remainder will be credit sales. Forty percent of a month's credit sales are collected in the month the sales are made, and the remaining 60% is colected in the folowing month. All of the September 30 accounts receivable wil be collected n October following month's cost of goods sold. 3. Al merchandise purchases are on account Thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October 4. Selling and administrative expenses for October are budgeted at $86,800, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $2,790 for the month Required 1. Using the information provided, calculate or prepare the following: a. The budgeted cash collections for October b. The budgeted merchandise purchases for October c. The budgeted cash disbursements for merchandise purchases for October d. The budgeted net operating income for October e. A budgeted balance sheet at October 31 1012 Next > lacBook Ai 40 F12 F1OExplanation / Answer
Answer 1-a Sales Budget Oct Nov Sales 300,000 310,000 Cash Sales - 35% 105,000 108,500 Credit Sales - 65% 195,000 201,500 Budgeted Cash Collections Oct Cash Sales 105,000 Collection from Accounts Receivables Accounts Receivables - Sep 102,000 Oct Sales - $195,000 X 40% 78,000 Total cash Collections 285,000 Answer 1-b. Merchandise Purchase Budget Oct Nov Cost of Goods Sold - 45% of Sales 135,000 139,500 Add: Ending Inventory - $139,500 X 30% 41,850 Total Needs 176,850 Less: opening Inventory (40,500) Required Purchases 136,350 Answer 1-c. Schedule of Cash payments to Suppliers Oct Cash Payment Accounts Payable - Sep 129,600 Oct Purchases - $136,350 X 30% 40,905 Total Cash Payment to Suppliers 170,505 Cash budget Oct Opening cash Balance 78,600 Add: receipts Collection from Customers 285,000 Total Cash available 363,600 Less: Disbursements Cash Disbursement - Accounts Payable 170,505 Selling & Admn. Exp. - $86,800 86,800 Total Disbursement 257,305 Cash Balance Closing 106,295 Answer 1-d. Income Statement For the Month Ending Oct 31 Sales 300,000 Less: Cost of Goods Sold - 45% of sales 135,000 Gross Margin 165,000 Less: Selling & Admn. Exp. 89,590 Net Income 75,410 Answer 1-e. Balance Sheet As on Oct 31 Assets Current Assets Cash 106,295 Accounts receivables 117,000 Inventory 41,850 265,145 Fixed Assets Building & Equipment - $279,000 - $2,790 276,210 Total Assets 541,355 Liabilities Accounts Payable 95,445 Total liabilities 95,445 Shareholders's Equity Common Stock 216,000 Retained Earnings 229,910 Total Stockholders equity 445,910 Total liabilities & Stockholders' Equity 541,355 Schedule of Retained Earnings As on Oct 31 Opening Balance 154,500 Add: net income 75,410 Closing Balance 229,910 Answer 2-a Sales Budget Oct Nov Sales 300,000 310,000 Cash Sales - 35% 105,000 108,500 Credit Sales - 65% 195,000 201,500 Budgeted Cash Collections Oct Cash Sales 105,000 Collection from Accounts Receivables Accounts Receivables - Sep 102,000 Oct Sales - $195,000 X 50% 97,500 Total cash Collections 304,500 Answer 2-b. Merchandise Purchase Budget Oct Nov Cost of Goods Sold - 45% of Sales 135,000 139,500 Add: Ending Inventory 13,950 Total Needs 148,950 Less: opening Inventory (40,500) Required Purchases 108,450 Answer 2-c. Schedule of Cash payments to Suppliers Oct Cash Payment Accounts Payable - Sep 129,600 Oct Purchases - 21,690 Total Cash Payment to Suppliers 151,290 Cash budget Oct Opening cash Balance 78,600 Add: receipts Collection from Customers 304,500 Total Cash available 383,100 Less: Disbursements Cash Disbursement - Accounts Payable 151,290 Selling & Admn. Exp. 86,800 Total Disbursement 238,090 Cash Balance Closing 145,010 Answer 2-d. Income Statement For the Month Ending Oct 31 Sales 300,000 Less: Cost of Goods Sold - 45% of sales 135,000 Gross Margin 165,000 Less: Selling & Admn. Exp. 89,590 Net Income 75,410 Answer 2-e. Balance Sheet As on Oct 31 Assets Current Assets Cash 145,010 Accounts receivables 97,500 Inventory 13,950 256,460 Fixed Assets Building & Equipment - $279,000 - $2,790 276,210 Total Assets 532,670 Liabilities Accounts Payable 86,760 Total liabilities 86,760 Shareholders's Equity Common Stock 216,000 Retained Earnings 229,910 Total Stockholders equity 445,910 Total liabilities & Stockholders' Equity 532,670 Schedule of Retained Earnings As on Oct 31 Opening Balance 154,500 Add: net income 75,410 Closing Balance 229,910
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