($130,000 x 75%) + ($100,000 + 25%)$122,500Determining cost of goods sold on the budgeted income statement and valuing endinginventories requires the:unit product cost.Planninginvolves developing goals for the budget, whereasControlinvolves steps taken toensure that steps towards meeting the goal are being followed.If budgeted sales are 10,000 units, the desired ending inventory of finished goods is 5,000 units,and the beginning inventory of finished goods is 2,000 units, required production is:Sales + Desired EI – BI10,000 + 5,000 – 2,00013,000 unitsA manager who is unable to meet a budget that has been imposed from above can always say thatthe budget was unrealistic and impossible to meet. With aself-imposedbudget, this excuse is notavailable.When a company does not use self-imposed budgeting, top managers initiate the budgetingprocess by issuing profit targets and directlow-level managersto prepare budgets that meetthose targets.The budget committeeis usually responsible for overall policy relating to the budget programand for coordinating the preparation of the budget itself.Amerchandise purchasebudget shows the amount of goods for resale to be purchased fromsuppliers during the period.What type of budget is very challenging to meet and requires managers to stretch to meet goals? Show
 What type of budget may be challenging while still able to be met by competent managementexerting reasonable effort? Which of the following statements is false? Who has themostinfluence over lower-level managers’ attitudes towards a budget program? The financial controller of ABC Co. Ltd., Mr.Osei Antwi-Boasiako is gathering data to prepare a cash budget for the second quarter of 2005. The following information is available.
Required You are required to prepare a cash budget for ABC Co. Ltd covering the second quarter April to June 2005. Q: The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the… A: Sales = 10% cash , 90% on accounts 90% of accounts sales = 70% paid in next month , 30% in… Q: On October 1 of the current year, Molloy Corporation prepared a cash budget for October, November,… A: Cash Outflow - Any money leaving a business or company is referred to as a cash outflow. It could be… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: A cash budget is prepared to estimate the total cash received and total cash disbursement on the… Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation… A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %… Q: Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash… A: A cash budget is budget of expected cash receipts and disbursements during a period. It includes… Q: a. At $37 each, unit sales are 5,000 and 6,000 for March and April, respectively. Total sales are… A: Cash Budget: In the business world, a cash budget is an estimate of a company's cash flows over a… Q: Parlee Company's sales are 30% in cash and 70% on credit. Sixty percent of the credit sales are… A: Formula: Cash sales value = Total sales x Cash sale Percentage Multiplying total sales with cash… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: The question is based on the concept of Budgeting in cost accounting. Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: Cash Budget: It is the predetermined flow of cash which is going to be happened within the entity… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: A cash budget is a statement prepared by the company to determine how much cash they expect to be… Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation… A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %… Q: The financial controller of ABC Co. Ltd., Mr.Osei Antwi-Boasiako is gathering data to prepare a cash… A: Workings: Q: The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next… A: What is meant by budgeting? It is the method of forecasting the future inflows and outflows of an… Q: Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on… A: A) Schedule of the Expected Cash Collections Month July August September May $160,000… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: Given, Loan is taken at the beginning of the Quarter and paid at the end of the Quarter. Q: Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash… A: Balance sheet: Balance Sheet is one of the financial statements that summarize the assets, the… Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation… A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: The question is based on the concept of Cost Management. A cash budget is a forecast of expected… Q: La Famiglia Pizzeria provided the following information for the month of October: Sales are… A: Cash budget is prepared to assess the cash surplus or shortage expected in the budgeted period. This… Q: Thornton, Inc. has budgeted sales for the months of September and October at $300,000 and $270,000,… A: A cash budget is an estimation of expected cash receipts and disbursements on the basis of past… Q: Your Company's sales are 20% in cash and the rest on credit. Forty-five percent of the credit sales… A: Working Note: Credit sales % = 100 - cash sales % = 100% - 20% = 80% Q: Prepare a cash budget for Atlas Products, A: Cash budget is an estimate of the cash receipts and cash payments of an entity. It includes cash… Q: Your Company's sales are 25% in cash and the rest on credit. Fifty percent of the credit sales are… A: Budgeted cash collection is the estimated cash collected in the particular period of time from the… Q: The following various elements relate to Whitfield, Inc.'s cash budget for April of the current… A: The cash collection schedule is prepared to record the estimated cash collection during the period… Q: Farmerlands Enterprises has budgeted sales for the months of September and October at $300,000 and… A: Total Sales = Cash Sales +Credit Sales Q: Provide a supporting schedule of cash collections. A: Details about Cash collections is: . Sales July (Actual) $100.000 August (Actual)… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: Cash Budget - It is an estimation of cashflow of a business for specific period of time. It shows… Q: The Lowville Company has budgeted the following data for November: • Sales of $1,728,300, all in… A: A cash budget is prepared to calculate the estimated cash receipts and cash payments. Cash budget is… Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation… A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %… Q: Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on… A: Particulars July August September Sales Collection May 160,000 June… Q: Fenway Company has budgeted the following amounts for sales in 2002: Month Sales April… A: "Since you have asked multiple questions, we will solve first question for you. If you want any… Q: Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash… A: Click to see the answer Q: Whispering Winds Company has budgeted sales revenue as follows for the next 4 months: February… A: The cash receipts schedule includes the total cash collection during the period. Q: Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a… A: 1. Budgeting - Budgeting is the process of estimating future operation based on the past… Q: Francis and Company have planned a cash budget for the third quarter of 2004. The cash balance on… A: Part a: Workings: Q: Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on… A: Cash budget is very important budget that is prepared to review and analyse liquidity position of… Q: The following various elements relate to Whitfield, Inc.'s cash budget for April of the current… A: The cash budget is an estimation of cash receipts and expenses on the basis of previous experience. Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: Cash budget is prepared to identify the total cash receipts and disbursements expected in the… Q: Nestee controller for Mactan Relaters has assembled the following data to assist in the preparation… A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %… Q: Francis and Company have planned a cash budget for the third quarter of 2004. The cash balance on… A: A cash budget is a statement that shows the cash balance at the beginning, cash balance at the end,… Q: Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has… A: >Cash Budget is prepared as part of budgeting process. >It is usually the final budget… Q: Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on… A: Click to see the answer Q: $600,000 July $750,000 $550,000 August $650,000 $450,000 A: Given: To calculate the schedule of expected cash collections, cash disbursements and cash budget… Q: Your Company's sales are 40% in cash and the rest on credit. Fifty percent of the credit sales are… A: Sales budget is a financial plan about how the resources should be used to obtain forecasted sales. Q: Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a… A: Expected cash collections and expected cash disbursements are calculated for preparation of cash… Q: Francis and Company has planned a cash budget for the third quarter of 2004. The cash balance on… A: Cash budget is one of the important budget that is being prepared by the business in order to review… Q: Kent Sdn Bhd needs to come up with a cash budget to make sure that there is sufficient cash within… A: Cash budget in the business shows all cash receipts and cash payments from the business for the…
Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. Bernard Creighton is the controller for Creighton Hardware Store. In putting together the cash budget for the fourth quarter of the year, he has assembled the following data. a. Sales b. Each month, 20 percent of sales are for cash, and 80 percent are on credit. The collection pattern for credit sales is 20 percent in the month of sale, 50 percent in the following month, and 30 percent in the second month following the sale. c. Each month, the ending inventory exactly equals 40 percent of the cost of next months sales. The markup on goods is 33.33 percent of cost. d. Inventory purchases are paid for in the month following purchase. e. Recurring monthly expenses are as follows: f. Property taxes of 15,000 are due and payable on September 15. g. Advertising fees of 6,000 must be paid on October 20. h. A lease on a new storage facility is scheduled to begin on November 2. Monthly payments are 5,000. i. The company has a policy to maintain a minimum cash balance of 10,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All payments on principal and interest are made at the end of the month. The annual interest rate is 9 percent. The company must borrow in multiples of 1,000. j. A partially completed balance sheet as of August 31 is given below. (Accounts payable is for inventory purchases only.) Required: 1. Complete the balance sheet given in part (j). 2. Bernard wants to see how the company is doing prior to starting the month of December. Prepare a cash budget for the months of September, October, and November and for the three-month period in total (the period begins on September 1). Provide a supporting schedule of cash collections. 3. Prepare a pro forma balance sheet as of November 30. Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the follow sales: In Shalimars experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are 4,900,000 and for the fourth quarter of the current year are 6,850,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. 2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. 3. What if the recession led Shalimars top management to assume that in the next year 10 percent of credit sales would never be collected? The expected payment percentages in the quarter of sale and the quarter after sale are assumed to be the same. How would that affect cash received in each quarter? Construct a revised cash budget using the new assumption. A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000 Before the year began, the following static budget was developed for the estimated sales of 50,000. Sales are higher than expected and management needs to revise its budget. Prepare a flexible budget for 100,000 and 110,000 units of sales. Janet Wooster owns a retail store that sells new and used sporting equipment. Janet has requested a cash budget for October. After examining the records of the company, you find the following: a. Cash balance on October 1 is 1,118. b. Actual sales for August and September are as follows: c. Credit sales are collected over a three-month period: 40 percent in the month of sale, 36 percent in the next month, and 22 percent in the second month after the sale. The remaining sales are uncollectible. d. Inventory purchases average 70 percent of a months total sales. Of those purchases, 45 percent are paid for in the month of purchase. The remaining 55 percent are paid for in the following month. e. Salaries and wages total 3,850 per month. f. Rent is 3,150 per month. g. Taxes to be paid in October are 1,635. h. Janet usually withdraws 3,500 each month as her salary. i. Advertising is 1,500 per month. j. Other operating expenses total 3,800 per month. k. Internet and telephone fees are 320 per month. Janet tells you that she expects cash sales of 5,000 and credit sales of 63,000 for October. She likes to have 3,000 on hand at the end of the month and is concerned about the potential October ending balance. Required: 1. Prepare a cash budget for October. Include supporting schedules for cash collections and cash payments. (Round all amounts to the nearest dollar.) 2. Did the business meet Janets desired ending cash balance for October? Assuming that the owner has no hope of establishing a line of credit for the business, what recommendations would you give the owner for meeting the desired cash balance? Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted) Before the year began, the following static budget was developed for the estimated sales of 100,000. Sales are sluggish and management needs to revise its budget. Use this information to prepare a flexible budget for 80,000 and 90,000 units of sales. The sales department of Macro Manufacturing Co. has forecast sales for its single product to be 20,000 units for June, with three-quarters of the sales expected in the East region and one-fourth in the West region. The budgeted selling price is 25 per unit. The desired ending inventory on June 30 is 2,000 units, and the expected beginning inventory on June 1 is 3,000 units. Prepare the following: a. A sales budget for June. b. A production budget for June. Preparing a Cash Budget Olivers Bistro provided the following information for the month of October: a. Sales are budgeted to be 395,000. About 80% of sales is cash; the remainder is on account. b. Olivers Bistro expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in the following month. c. Food and supplies purchases, all on account, are expected to be 285,000. Oliver pays 35% in the month of purchase and 65% in the month following purchase. d. Most of the work is done by Oliver and his wife, who typically withdraw 18,500 a month from the business as their salary. (Note: The 18,500 is a payment in total to the two owners, not per person.) Various part-time workers cost 29,300 per month. They are paid for their work weekly, so on average 90% of their wages is paid in the month incurred and the remaining 10% in the next month. e. Utilities and insurance average 8,750 per month. Rent on the building is 14,000 per month. f. In September, a freezer had to be replaced for 39,000. That amount is due in total in October. g. September sales were 390,000, and purchases of food and supplies in September equaled 275,000. h. The cash balance on October 1 is 1,916. Required: 1. Calculate the cash receipts expected in October. (Hint: Remember to include both cash sales and payments from credit sales.) 2. Calculate the cash needed in October to pay for food purchases. 3. Prepare a cash budget for the month of October. Relevant data from the Poster Companys operating budgets are: Additional data: Capital assets were sold in January for $10,000 and $4,500 in May. Dividends of $4,500 were paid in February. The beginning cash balance was $60,359 and a required minimum cash balance is $59,000. Use this information to prepare a cash budget for the first two quarters of the year Cash budget The controller of Bridgeport Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent 50,000 of the estimated monthly manufacturing costs. The annual insurance premium is paid in January, and the annual property taxes are paid in December. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month. Current assets as of September 1 include cash of 40,000, marketable securities of 75,000, and accounts receivable of 300,000 (60,000 from July sales and 240,000 from August sales). Sales on account for July and August were 200,000 and 240,000, respectively. Current liabilities as of September 1 include 40,000 of accounts payable incurred in August for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of 55,000 will be made in October. Bridgeports regular quarterly dividend of 25,000 is expected to be declared in October and paid in November. Management desires to maintain a minimum cash balance of 50,000. Instructions Prepare a monthly cash budget and supporting schedules for September, October, and November. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller? Preparing a Cash Budget La Famiglia Pizzeria provided the following information for the month of October: a. Sales are budgeted to be 157,000. About 85% of sales is cash; the remainder is on account. b. La Famiglia expects that, on average, 70% of credit sales will be paid in the month of sale, and 28% will be paid in the following month. c. Food and supplies purchases, all on account, are expected to be 116,000. La Famiglia pays 25% in the month of purchase and 75% in the month following purchase. d. Most of the work is done by the owners, who typically withdraw 6,000 a month from the business as their salary. (Note: The 6,000 is a payment in total to the two owners, not per person.) Various part-time workers cost 7,300 per month. They are paid for their work weekly, so on average 90% of their wages is paid in the month incurred and the remaining 10% in the next month. e. Utilities average 5,950 per month. Rent on the building is 4,100 per month. f. Insurance is paid quarterly; the next payment of 1,200 is due in October. g. September sales were 181,500 and purchases of food and supplies in September equaled 130,000. h. The cash balance on October 1 is 2,147. Required: 1. Calculate the cash receipts expected in October. (Hint: Remember to include both cash sales and payments from credit sales.) 2. Calculate the cash needed in October to pay for food purchases. 3. Prepare a cash budget for the month of October. SEE MORE QUESTIONS Recommended textbooks for you Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Principles of Cost Accounting ISBN:9781305087408 Author:Edward J. Vanderbeck, Maria R. Mitchell Publisher:Cengage Learning Principles of Accounting Volume 2 ISBN:9781947172609 Author:OpenStax Publisher:OpenStax College Which of the following budgets constitutes the first step in the entire budgeting process?A cash budget is the estimation of cash inflow and outflow for a period. It is prepared when major budgets are prepared. So, the first step in the budgeting process is the preparation of the sales forecast.
Which of the following budgets shows the company's planned profit and serves as a benchmark against which subsequent company performance can be measured?Sales price per unit The budgeted income statement shows a company's planned net profit and serves as a benchmark against which subsequent company performance can be measured. ABC, Inc.'s expected sales for the first six month of the year are as follows.
What is usually the major source of receipts in the receipts section of the cash budget?The cash budget is comprised of two main areas, which are Sources of Cash and Uses of Cash. The Sources of Cash section contains the beginning cash balance, as well as cash receipts from cash sales, accounts receivable collections, and the sale of assets.
Which of the following lists the components of the master budget in correct chronological order?Which of the following lists the components of the master budget in correct chronological order? Budgeted income statement, cash budget, budgeted balance sheet. Which of the following would not appear in the operating expense budget? Depreciation on the production equipment.
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Abc, inc.s expected sales for the first six month of the year are as follows.
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