Managerial accounting free essay sample

a. Sales budget: April May June Quarter Budgeted sales in units 35,000 45,000 60,000 140,000 Selling price per unit Ãâ€" $8 Ãâ€" $8 Ãâ€" $8 Ãâ€" $8 Total sales $280,000 $360,000 $480,000 $1,120,000 b. Schedule of expected cash collections: February sales $ 48,000 $ 48,000 March sales 112,000 $ 56,000 168,000 April sales 70,000 140,000 $ 70,000 280,000 May sales 90,000 180,000 270,000 June sales 120,000 120,000 Total cash collections $230,000 $286,000 $370,000 $ 886,000 c. Merchandise purchases budget: Budgeted sales in units 35,000 45,000 60,000 140,000 Add budgeted ending inventory* 40,500 54,000 36,000 36,000 Total needs 75,500 99,000 96,000 176,000 Less beginning inventory 31,500 40,500 54,000 31,500 Required unit purchases 44,000 58,500 42,000 144,500 Unit cost Ãâ€" $5 Ãâ€" $5 Ãâ€" $5 Ãâ€" $5 Required dollar purchases $220,000 $292,500 $210,000 $ 722,500 *90% of the next month’s sales in units. Case 8-29 d. Budgeted cash disbursements for merchandise purchases: April May June Quarter March purchases $ 85,750 $ 85,750 April purchases 110,000 $110,000 220,000 May purchases 146,250 $146,250 292,500 June purchases 105,000 105,000 Total cash payments $195,750 $256,250 $251,250 $703,250 2. Cravat Sales Company Cash Budget For the Three Months Ending June 30 April May June Quarter Cash balance, beginning $ 14,000 $ 10,250 $ 10,000 $ 14,000 Add receipts from customers (Part 1 b.) 230,000 286,000 370,000 886,000 Total cash available 244,000 296,250 380,000 900,000 Less disbursements: Purchase of inventory (Part 1 d.) 195,750 256,250 251,250 703,250 Sales commissions 35,000 45,000 60,000 140,000 Salaries and wages 22,000 22,000 22,000 66,000 Utilities 14,000 14,000 14,000 42,000 Miscellaneous 3,000 3,000 3,000 9,000 Dividends paid 12,000 0 0 12,000 Land purchases 0 25,000 0 25,000 Total disbursements 281,750 365,250 350,250 997,250 Excess (deficiency) of receipts over disbursements (37,750) (69,000) 29,750 (97,250) Financing: Borrowings 48,000 79,000 0 127,000 Repayments* 0 0 (16,000) (16,000) Interest* 0 0 (3,020) (3,020) Total financing 48,000 79,000 (19,020) 107,980 Cash balance, ending $ 10,250 $ 10,000 $ 10,730 $ 10,730 *This is the maximum amount (in increments of $1,000) that the company could repay to the bank and still have at least a ,000 ending balance. We will write a custom essay sample on Managerial accounting or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page ** $48,000 Ãâ€" 1% Ãâ€" 3 = $1,440 $79,000 Ãâ€" 1% Ãâ€" 2 = 1,580 Total interest = $3,020 Case 8-29 3. Cravat Sales Company Budgeted Income Statement For the Three Months Ended June 30 Sales revenue (Part 1 a.) $1,120,000 Variable expenses: Cost of goods sold (140,000 ties @ $5 per tie) $700,000 Commissions (140,000 ties @ $1 per tie) 140,000 840,000 Contribution margin 280,000 Fixed expenses: Wages and salaries 66,000 Utilities 42,000 Insurance expired 3,600 Depreciation 4,500 Miscellaneous 9,000 125,100 Net operating income 154,900 Interest expense 3,020 Net income $ 151,880 Case 8-29 4. Cravat Sales Company Budgeted Balance Sheet June 30 Assets Cash (Part 2) $ 10,730 Accounts receivable (see below) 450,000 Inventory (36,000 ties @ $5 per tie) 180,000 Unexpired insurance ($14,400 – $3,600) 10,800 Fixed assets, net of depreciation ($172,700 + $25,000 – $4,500) 193,200 Total assets $844,730 Liabilities and Stockholders’ Equity Accounts payable, purchases (50% Ãâ€" $210,000.) $105,000 Dividends payable 12,000 Loans payable, bank ($127,000 – $16,000) 111,000 Capital stock, no par 300,000 Retained earnings (see below) 316,730 Total liabilities and equity $844,730 Accounts receivable at June 30: 25% Ãâ€" May sales of $360,000 $ 90,000 75% Ãâ€" June sales of $480,000 360,000 Total $450,000 Retained earnings at June 30: Balance, March 31 $176,850 Add net income (Part 3) 151,880 Total 328,730 Less dividends declared 12,000 Balance, June 30 $316,730