Question

use the below worksheet to answer the following

for example, in cell B26 enter the formula "= B5".

Check your worksheet by changing the budgeted unit sales in Quarter 2 of Year 2 in cell C5 to 75,000 units. The required production for the year should be 274,000 units. The cost of raw materials to be purchased for the year should be $1,106,800, whereas the total cash disbursements for the year should be $1,095,980. If you do not get this answer, find the errors in your worksheet and correct them.

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1 Chapter 8: Applying Excel 2 3 Data Year 2 Quarter Year 3 Quarter 4 1 2 4 2 5 Budgeted unit sales 60,000 70,000 80,000 40,000 100,000 50,000 7Selling price per unit Accounts receivable, beginning balance 9 Sales collected in the quarter sales are made 10Sales collected in the quarter after sales are made 11 Desired ending finished goods inventory is 12 Finished goods inventory, beginning 13 Raw materials required to produce one unit 14 Desired ending inventory of raw materials is 15 Raw materials inventory, beginning 16.Raw material costs 17Raw materials purchases are paid $8 per unit $65,000 8 75% 25% 30% of the budgeted unit sales of the next quarter 12,000 units 5 pounds 10% of the next quarter's production needs 23,000 pounds $0.80 per pound 60% in the quarter the purchases are made 40% in the quarter following purchase $81,500 18 and 19 Accounts payable for raw materials, beginning balance 20 21 Enter a formula into each of the cells marked with a ? below 22 Review Problem: Budget Schedules 23 24 Construct the sales budget Year 2 Quarter Year 3 Quarter 25 1 3 4 1 2 26 Budgeted unit sales 27 Selling price per unit 28 Total sales ? 29 30 Construct the schedule of expected cash collections Year 2 Quarter 31 1 2 3 4 Year 32 Accounts receivable, beginning balance 33 First-quarter sales 34 Second-quarter sales 35 Third-quarter sales 36 Fourth-quarter sales 37 Total cash collections 2. 2. 2

Answer 1

Solutions:

G H Particulars Budgeted unit sales selling price per unit Total sales Schedule of expected cash collection Quarter 1 Quarter 2 Quarter 3 40000 60000 1000001 $8.00 $8.00 $8.00 $320,000.00 $480,000.00 $800,000.00 Year 3 Quarer 2 80000 Quarter 4 50000 $8.00 $400,000.00 Year 3 Quarer 1 70000 $8.00 $560,000.00 $8.00 $640,000.00 9 10 11 13 14 15 Schedule of expected cash collection Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Accounts receivables beginning $65,000.00 Cash received for Q1 Sale (Units *$8*% collection) | $240,000.00 $80,000.00 Cash received for Q2 Sale $360,000.00 $120,000.00 Cash received for Q3 Sale $600,000.00 $200,000.00 Cash received for Q4 Sale $300,000.00 Budgeted Cash Collection $305,000.00 $440,000.00 $720,000.00 $500,000.00 Year $65,000.00 $320,000.00 $480,000.00 $800,000.00 $300,000.00 $1,965,000.00 16 17 18 19 20 21 22 23 24 Particulars Budgeted sales unit Add: ending inventory (30% of next quarter sales) Less: Beginning inventory Production Budget Quarter 1 Quarter 2 Quarter 3 40000 60000 100000 18000 30000 15000 12000 18000 30000 Quarter 4 | 50000 21000 15000 Year Quarter 1, next year Quarter 2, next year 250000 70000 80000 21000 24000 12000 21000 25 26 27 Estimated production unit 46000 72000 85000 560001 259000 73000 28 29 2) Sheet393 (3) Sheet708 Sheet253 (2) Sheet710 Sheet711 Sheet574 (5) Sheet665

29 30 31 32 33 Quarter 4 56000 34 Budgeted Cost of raw material purchases Particulars Quarter 1 | Quarter 2 Quarter 3 Budgeted Production units 46000 72000 85000 Raw material per unit (In Pounds) 51 Total requirement of raw materials 230000 360000 425000 Add: Desired ending inventory (10% of next quarter production needs) 36000 42500 28000 Less: Beginning inventory 23000 36000 42500 Year Quarter 1, next year 259000 73000 5 1295000 365000 5 280000 36500 28000 36500 23000 243000 Budgeted purchase units of raw material (In Pounds Raw material cost per pound 366500 $0.80 410500 $0.80 288500 $0.80 1308500 $0.80 $0.80 Budgeted cost of purchases $194,400.00 $293,200.00 $328,400.00 $230,800.00 $1,046,800.00 44 45 46 48 Schedule of expected cash disbursement for merchandise purchases Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Accounts Payable, Beginning $81,500.00 01 Purchases $116,640.00 $77,760.00 02 Purchases $175,920.00 $117,280.00 Q3 Purchases $197,040.00 $131,360.00 Q4 Purchases $138,480.00 Total payments | $198.140.00 $253.680.00 $314,320.000 $269.840.00| 49 Year $81,500.00 $194,400.00 $293,200.00 $328,400.00 $138,480.00 $1,035,980.00 50 51 52 53 54 55 56 ager 2) Sheet393 (3) Sheet708 Sheet253 (2) Sheet710 Sheet711 Sheet574 (5) Sheet665