261ch9other.docsdfgs

Problem 9-13 (60 minutes) 1. Schedule of cash receipts: Cash sales—June..................................................... $ 60,000 Collections on accounts receivable: May 31 balance.................................................... 72,000 June (50% × 190,000)........................................... 95,000 Total cash receipts................................................... $227,000 Schedule of cash payments for purchases: May 31 accounts payable balance........................... $ 90,000 June purchases (40% × 200,000)............................ 80,000 Total cash payments................................................ $170,000 PHOTOTEC, INC. Cash Budget For the Month of June Cash balance, beginning......................................... $ 8,000 Add receipts from customers (above)...................... 227,000 Total cash available................................................. 235,000 Less disbursements: Purchase of inventory (above).............................. 170,000 Operating expenses.............................................. 51,000 Purchases of equipment........................................ 9,000 Total cash disbursements........................................ 230,000 Excess of receipts over disbursements.................... 5,000 Financing: Borrowings—note.................................................. 18,000 Repayments—note................................................ (15,000) Interest................................................................. (500) Total financing......................................................... 2,500 Cash balance, ending.............................................. $ 7,500

Problem 9-13 (continued) 2.

PHOTOTEC, INC. Budgeted Income Statement For the Month of June Sales....................................................................... $250,000 Cost of goods sold: Beginning inventory.............................................. $ 30,000 Add purchases...................................................... 200,000 Goods available for sale........................................ 230,000 Ending inventory................................................... 40,000 Cost of goods sold................................................190,000 Gross margin........................................................... 60,000 Operating expenses ($51,000 + $2,000)................................................................. 53,000 Net operating income.............................................. 7,000 Interest expense..................................................... 500 Net income.............................................................. $ 6,500

3.

PHOTOTEC, INC. Budgeted Balance Sheet June 30 Assets Cash........................................................................ $ 7,500 Accounts receivable (50% × 190,000).................... 95,000 Inventory................................................................. 40,000 Buildings and equipment, net of depreciation ($500,000 + $9,000 – $2,000)..............................507,000 Total assets............................................................. $649,500 Liabilities and Equity Accounts payable (60% × 200,000)........................ $120,000 Note payable........................................................... 18,000 Capital stock...........................................................420,000 Retained earnings ($85,000 + $6,500).................... 91,500 Total liabilities and equity........................................ $649,500

Problem 9-18 (60 minutes) 1. a. Schedule of expected cash collections:

Year 1—Fourth quarter sales: $300,000 × 65% Year 2—First quarter sales: $400,000 × 33% $400,000 × 65% Year 2—Second quarter sales: $500,000 × 33% $500,000 × 65% Year 2—Third quarter sales: $600,000 × 33% $600,000 × 65% Year 2—Fourth quarter sales: $480,000 × 33% Total cash collections

First

Year 2 Quarter Second Third

Fourth

$195,000 132,000

$260,00 0 165,000

$325,00 0 198,000

$390,00 0

158,400 $425,00 $523,00 $548,40 $327,000 0 0 0

Problem 9-18 (continued) b. Schedule of budgeted cash disbursements for merchandise purchases:

Year 1—Fourth quarter purchases: $180,000 × 80% Year 2—First quarter purchases: $260,000 × 20% $260,000 × 80% Year 2—Second quarter purchases: $310,000 × 20% $310,000 × 80% Year 2—Third quarter purchases: $370,000 × 20% $370,000 × 80% Year 2—Fourth quarter purchases: $240,000 × 20% Total cash disbursements

First

Year 2 Quarter Second Third

Fourth

$144,000 52,000

$208,00 0 62,000

$248,00 0 74,000

$296,00 0

48,000 $270,00 $322,00 $344,00 $196,000 0 0 0

Problem 9-18 (continued) 2. First Budgeted sales Variable expense rate Variable expenses Fixed expenses Total expenses Less depreciation

$400,000 × 12% 48,000 90,000 138,000 20,000

Cash disbursements

$118,000

Year 2 Quarter Second Third $500,00 $600,00 0 0 × 12% × 12% 60,000 72,000 90,000 90,000 150,000 162,000 20,000 20,000 $130,00 $142,00 0 0

Fourth $480,00 0 × 12% 57,600 90,000 147,600 20,000 $127,60 0

Year $1,980

×1 237,6 360,0 597,6 80,0 $ 517

Problem 9-18 (continued) 3. Cash budget for Year 2:

Cash balance, beginning Add collections from sales Total cash available Less disbursements: Merchandise purchases Operating expenses Dividends Land Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest* Total financing Cash balance, ending *60,000 × 10% × 9/12 = $4,500.

Year 2 Quarter First Second Third Fourth $  $  20,000 $ 23,000 18,000 $ 18,500 $ 327,000 425,000 523,000 548,400 347,000 448,000 541,000 566,900

196,000 270,000 322,000 344,000 1 118,000 130,000 142,000 127,600 10,000 10,000 10,000 10,000 0 80,000 48,500 0 324,000 490,000 522,500 481,600 23,000 (42,000) 0 0

60,000 0

0

0

0 60,000 $  23,000 $ 18,000

18,500

85,300

0 0 0 (60,000) (4,500 0 ) (64,500 0 ) $  18,500 $ 20,800 $