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accounting problems with all solutions




Question;Peak sales for Midwest Products, a wholesale distributor of;leaf rakes, occur in August. The;company's sales budget for the third quarter showing these peak sales is given;below;May June July August September Total;Budgeted;Sales (All on Account);$5,84,000 $7,52,000 $4,68,000 $18,04,000;Actual;Sales (All on Account) $4,33,000;$5,04,000;Total;Sales $4,33,000;$5,04,000 $5,84,000 $7,52,000 $4,68,000;$27,41,000;From past experience, the company has learned that 25% of a;month's sales are collected in the;month of sale, another 65% are collected in the month;following the sale, and the remaining 10% are;collected in the second month following the sale. Bad debts are negligible and can be ignored. 2Assume that the company will prepare a budgeted balance sheet as;of September 30. Compute the A/R as of;that date.3Crystal telecom has budgeted the sales of its innovative mobile;phone over the next four months as follows;Unit;Sales;July;18,000;August;38,000;September;63,000;October;50,000;The company is now;in the process of preparing a production budget for the third quarter. Past;experience has;shown that end-of-month inventories of finished goods must equal 15% of the;next;month's sales. The inventory at the end of June was 2,700;units 4Micro Products, Inc. has developed a very powerful;electronic calculator. Each calculator;requires 4 small "chips" that cost $6 each and are purchased from an;overseas supplier.;Micro Products has prepared a production budget for the calculator by;quarters for Year 2 and for the first quarter of Year 3, as shown below;1st;Quarter Y2 2nd Quarter Y2 3rd Quarter Y2 4th;Quarter Y2 1st Quarter Y3;Budgeted Production (Calculators) 59,000 81,000 1,46,000 97,000 78,000;The chip used in production of the calculator is sometimes;hard to get, so it is necessary to carry large inventories as a;precaution against stockout.;For this reason, the inventory of chips at the end of a quarter must be;equal to 25% of the;following quarter's production needs. A total of 59,000 chips will be on hand to;start the first quarter of Year 2.;Required;Prepare a direct materials budget for chips, by quarter and;in total, for Year 2. At the bottom of;your budget;show the dollar amount of purchases for each quarter and for;the year in total. 5Calgon Products, a distributor of organic beverages, needs a;cash budget for September. The following information is available: a. The cash;balance at the beginning of September is;$14,500. b. Actual;sales for July and August and expected sales for September are as follows: July August September Cash;sales $ 6,500 $ 4,100 $9,000 Sales;on account 21,000 33,000 39,000 Total;sales $ 27,500 $ 37,100 $ 48,400 Sales;on account are collected over a three-month period as follows: 10% collected in;the month of sale, 65% collected in the month following sale, and 23% collected;in the second month following sale. The remaining 2% is uncollectible. c. Purchases;of inventory will total $30,000 for September. Thirty percent of a month's;inventory purchases are paid for during the month of purchase. The accounts;payable remaining from August's inventory purchases total $17,000, all of which;will be paid in September. d. Selling;and administrative expenses are budgeted at $14,000 for September. Of this;amount, $4,000 is for depreciation. e. Equipment;costing $17,000 will be purchased for cash during September, and dividends;totaling $3,000 will be paid during the month f. The;company maintains a minimum cash balance of $10,500. An open line of credit is;available from the company's bank to bolster the cash balance as needed. Required;1. Prepare a Schedule of expected cash collections for;September. 6The balance sheet of Phototec, Inc. a distributor of;photographic supplies, as of May 31 is given below: PHOTOTEC, INC, May-31 Assets Cash $10,500 Accounts receivable $70,000 Inventory $35,000 Buildings and equipment, net of depreciation $5,84,500 Total assets $7,00,000 Liabilities and Stockholders' Equity Accounts payable, suppliers $84,000 Note payable $15,400 Capital stock, no par $5,16,600 Retained earnings $84,000 Total liabilities and stockholders' equity. $7,00,000 The company is in the process of preparing a budget for june;and has assembled the following data: a. Sales are budgeted at $273,000 for June. Of these sales;$75,000 will be for cash, the remainder will be credit sales. One-half of a;month's credit sales are collected in the month the sales are made, and the;remainder is collected in the month following. All of the May 31 accounts;receivable will be collected in June. b. Purchases of inventory are expected to total $199,000;during June. These purchases will al be on account. Forty percent of all;inventory purchases are paid for in the month of purchase, the remainder is;paid in the following month. All of the May 31 accounts payable to suppliers;will be paid during June. c. The June 30 inventory balance is budgeted at $39,000. d. Selling and admininstrative expenses for June are;budgeted at $35,000, exclusive of depreciation. These expenses will be paid in;cash. Depreciation is budgeted at $2,000 for the month. e. The note payable on the May 31 balance sheet will be paid;during June. The company's interest expense for June (on all borrowing) will be;$700, which will be paid in cash. f. New warehouse equipment costing $7,000 will be purchased;for cash during June. g. During June, the company will borrow $20,000 from its;bank by giving a new note payable to the bank for that amount. The new note;will be due in one year. Required;1a. Prepare schedule of expected cash collections from the;sales and a schedule of expected cash disbursements for inventory purchases. ="msonormal">="msonormal">


Paper#44176 | Written in 18-Jul-2015

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