Question

Please show full calculations for each. Thanks!

1)
ABC Company's budgeted sales are as follows:
July = 3,000 units;                August = 2,500 units.
June ending inventory = 1,200 units.
Budgeted ending inventory must equal 40% of next month's budgeted sales.
Production budgeted for July would equal units = ? units

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2)
ABC Company's budgeted production is as follows:
January = 5,000 units; February = 8,000 units.
Each unit produced requires 3 pounds of raw material.
January beginning inventory = 3,000 pounds.
Budgeted ending inventory must equal 20 percent of next month's production.
Raw material purchases budgeted for January would equal pounds = ? lbs

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3)
ABC Company collects sales as follows:
30% in the month of sale, 60% in the next month, and 8%in the second month after the sale; 2% is uncollectable.
Budgeted sales are as follows: March = $22,000; April = $19,000; May = $23,000.
Budgeted cash collections for May are $ ?

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4)
ABC Company collects sales as follows:
30% in the month of sale, 60% in the next month, and 8%in the second month after the sale; 2% is un-collectable.
Budgeted sales are as follows: March = $22,000; April = $19,000; May = $23,000.
Budgeted cash collections for March sales will be anticipated as follows:
March = $ ?        April = $ ?          May = $ ?

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5)
ABC Company pays for raw material purchases as follows:
75% in the month of purchase; 25% in the subsequent month.
Budgeted purchases are as follows: June = $56,000; July = $60,000.
Budgeted cash payment to be made in the month of July is $ ?

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6)
ABC Company pays for raw material purchases as follows:
75% in the month of purchase; 25% in the subsequent month.
Budgeted purchases are as follows: June = $56,000; July = $60,000.
Cash disbursement forecast for the purchases budgeted for the month of June will be anticipated as follows:
June = $ ?       July = $ ?

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7)
ABC Company has identified the following information related to its cash budget for October:
Beginning cash balance = $20,000; Cash receipts from sales = $100,000; Cash payments for purchases = $50,000;
Proceeds from borrowings = $25,000; Payments for other manufacturing expenses = $40,000;
Payments for operating expenses = $35,000; Dividend payment = $10,000;
Ending cash balance = $ ?

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8)
ABC Company requires a minimum cash balance of $15,000 at the end of each month and has identified the following information related to its cash budget for October:
Beginning cash balance = $20,000; Cash receipts = $125,000; Cash disbursements = $135,000;
Required short-term borrowing = $ ?      Ending cash balance = $ ?

Answer 1

1

PRODUCTION BUDGET

PARTICULARS	AMOUNT
Budgeted Sales for July	3,000
Less: Opening Inventory	1,200
Add: Closing Inventory	1,000
Units to be produced	2,800

Working Note

Closing Inventory = 40% of August's Budgeted sales

Closing Inventory = 40% of 2,500 = 1,000 units

2

RAW MATERIAL PURCHASE BUDGET

PARTICULARS	AMOUNT	WORKING
Raw material required for budgeted Sales for January	15,000	5,000 * 3
Less: Opening Inventory	3,000
Add: Closing Inventory	4,800
Raw material to be purchased	16,800

Working Note

Closing Inventory = 20% of Feb's production

Closing Inventory = 20% of 8,000 * 3pound = 4,800 units

3

CASH COLLECTIONS FOR MAY

PARTICULARS	AMOUNT	WORKING
From sales of May	6,900	23,000 * 30%
From sales of April	11,400	19,000 * 60%
From sales of March	1,760	22,000 * 8%
Total	20,060

4

Budgeted cash collections for March

PARTICULARS	AMOUNT	WORKING
In the month of March	6,600	22,000 * 30%
In the month of April	13,200	22,000 * 60%
In the month of May	1,760	22,000 * 8%
Total	21,560