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##### BMAL530 Assignment: Homework 4 FALL 2014

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Question;1.;award:4.28 out of;4.28 points;Kayak;Co. budgeted the following cash receipts (excluding cash receipts from loans;received) and cash disbursements (excluding cash disbursements for loan;principal and interest payments) for the first three months of next;year.;Cash;Receipts;Cash;Disbursements;January;\$;518,000;\$;471,000;February;403,000;366,000;March;471,000;525,000;According;to a credit agreement with the company?s bank, Kayak promises to have a;minimum cash balance of \$40,000 at each month-end. In return, the bank has;agreed that the company can borrow up to \$160,000 at an annual interest rate;of 12%, paid on the last day of each month. The interest is computed based on;the beginning balance of the loan for the month. The company repays principal;on the loan with available cash on the last day of each month. The company;has a cash balance of \$40,000 and a loan balance of \$80,000 at January 1.;Prepare;monthly cash budgets for each of the first three months of next year. (Amounts to be deducted should be indicated by a minus;sign.);2.;award:4.28 out of;4.28 points;Walker;Company prepares monthly budgets. The current budget plans for a September;ending inventory of 40,000 units. Company policy is to end each month with;merchandise inventory equal to a specified percent of budgeted sales for the;following month. Budgeted sales and merchandise purchases for the next three;months follow.;Sales (Units);Purchases (Units);July;220,000;236,000;August;300,000;298,000;September;290,000;272,000;3.;award:4.10 out of;4.28 points;Use the;following information to prepare the July cash budget for Acco Co. It should;show expected cash receipts and cash disbursements for the month and the cash;balance expected on July 31.;a.;Beginning;cash balance on July 1: \$74,000.;b.;Cash;receipts from sales: 10% is collected in the month of sale, 50% in the next;month, and 40% in the second month after sale (uncollectible accounts are;negligible and can be ignored). Sales amounts are: May (actual), \$1,800,000;June (actual), \$1,240,000, and July (budgeted), \$1,420,000.;c.;Payments;on merchandise purchases: 75% in the month of purchase and 25% in the month;following purchase. Purchases amounts are: June (actual), \$510,000, and July;(budgeted), \$470,000.;d.;Budgeted;cash disbursements for salaries in July: \$230,000.;e.;Budgeted;depreciation expense for July: \$14,000.;f.;Other;cash expenses budgeted for July: \$250,000.;g.;Accrued;income taxes due in July: \$90,000.;h.;Bank;loan interest due in July: \$7,000.;4.;award:4.28 out of;4.28 points;Following;information relates to Acco Co.;a.;Beginning;cash balance on July 1: \$35,000.;b.;Cash;receipts from sales: 24% is collected in the month of sale, 50% in the next;month, and 26% in the second month after sale (uncollectible accounts are;negligible and can be ignored). Sales amounts are: May (actual), \$1,204,000;June (actual), \$840,000, and July (budgeted), \$980,000.;c.;Payments;on merchandise purchases: 48% in the month of purchase and 52% in the month;following purchase. Purchases amounts are: June (actual), \$301,000, and July;(budgeted), \$600,000.;d.;Budgeted;cash disbursements for salaries in July: \$147,700.;e.;Budgeted;depreciation expense for July: \$8,400.;f.;Other;cash expenses budgeted for July: \$105,000.;g.;Accrued;income taxes due in July: \$80,000 (related to June).;h.;Bank;loan interest paid July 31: \$4,620.;Additional;Information;a.;Cost of;goods sold is 35% of sales.;b.;Inventory;at the end of June is \$56,000 and at the end of July is \$313,000.;c.;Salaries;payable on June 30 are \$35,000 and are expected to be \$28,000 on July 31.;d.;The;equipment account balance is \$1,120,000 on July 31. On June 30, the;accumulated depreciation on equipment is \$196,000.;e.;The;\$4,620 cash payment of interest represents the 1% monthly expense on a bank;loan of \$462,000.;f.;Income;taxes payable on July 31 are \$132,398, and the income tax rate applicable to;the company is 35%.;g.;The;only other balance sheet accounts are: Common Stock, with a balance of;\$482,520 on June 30, and Retained Earnings, with a balance of \$750,400 on;June 30.;Prepare;a budgeted income statement for the month of July and a budgeted balance;sheet for July 31.;5.;award:4.28 out of;4.28 points;Tempo;Company's fixed budget for the first quarter of calendar year 2013 reveals;the following.;Sales;(10,000 units);\$;2,020,000;Cost;of goods sold;Direct;materials;\$;236,700;Direct;labor;434,700;Production;supplies;266,200;Plant;manager salary;36,700;974,300;Gross;profit;1,045,700;Selling;expenses;Sales;commissions;77,200;Packaging;146,700;Advertising;100,000;323,900;Administrative;expenses;Administrative;salaries;86,700;Depreciation?office;equip.;56,700;Insurance;26,700;Office;rent;36,700;206,800;Income;from operations;\$;515,000;Prepare;flexible budgets that show variable costs per unit, fixed costs, and three;different flexible budgets for sales volumes of 8,000, 10,000, and 12,000;units. (Round cost per unit to 2 decimal;places.);6.;award:4.28 out of;4.28 points;Solitaire;Company?s fixed budget performance report for June follows. The \$630,000;budgeted expenses include \$592,200 variable expenses and \$37,800 fixed;expenses. Actual expenses include \$49,800 fixed expenses.;Fixed Budget;Actual Results;Variances;Sales;(in units);8,400;10,800;Sales;(in dollars);\$;840,000;\$;1,080,000;\$;240,000;F;Total;expenses;630,000;756,000;126,000;U;Income;from operations;\$;210,000;\$;324,000;\$;114,000;F;Prepare;a flexible budget performance report showing any variances between budgeted;and actual results. List fixed and variable expenses separately. (Do not round intermediate calculations.);7.;award:4.15 out of;4.32 points;Bay;City Company?s fixed budget performance report for July follows. The \$367,000;budgeted expenses include \$280,000 variable expenses and \$87,000 fixed;expenses. Actual expenses include \$77,000 fixed expenses.;Fixed Budget;Actual Results;Variances;Sales;(in units);5,000;3,900;Sales;(in dollars);\$;400,000;\$;347,100;\$;52,900;U;Total;expenses;367,000;337,000;30,000;F;Income;from operations;\$;33,000;\$;10,100;\$;22,900;U;Prepare;a flexible budget performance report that shows any variances between;budgeted results and actual results. List fixed and variable expenses;separately. (Do not round intermediate;calculations.)

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