Question

Question : 1 Budgeted Sales April (Actual) S7200,000 May 8400,000 June 1 020,000 July 1.080,000 August 600,000 September 900,000 Additional information Cash Sales 40% Credit sales (Collected the following month) 60% Prepare Sales Budget and Cash Collection from customers from May to August Solution: Schedule a Sales Budget Code Sales Schedule b. Cash Collection from Customers Collection Price month Tool Collection Question-2: A manufacturing Company provided the following information Budgeted Sales December (Actual) S480,000 January 560,000 February 680,000 March 720,000 April 400,000 May 600,000 Additional Information: a) Gross Profit rate 40% b) Minimum inventory policy as percent of next month's cost of goods sold 40% c) Inventory paid for in Month purchased 50% Month after purchase 50% d) Accounts payable (December) S 146,400, Prepare Purchases Budget and Cash Disbursement for purchases from January to April Schedule c. Purchases Budget Desired Ending very Plus Costa Talde Les Beginning lovely Toalhas Schedule-d. Cash Disbursement for Purchases

Answer 1

1.
a.

Sales Budget
	May	June	July	August	September
Cash Sales	$    3,360,000	$        408,000	$     432,000	$     240,000	$      360,000
Credit Sales	$    5,040,000	$        612,000	$     648,000	$     360,000	$      540,000
Total Sales	$    8,400,000	$    1,020,000	$ 1,080,000	$     600,000	$      900,000

b.

Cash collection from Customers
	May	June	July	August	September
Cash Sales	$    3,360,000	$       408,000	$        432,000	$     240,000	$     360,000
Collection from Prior Month	$    4,320,000	$    5,040,000	$        612,000	$     648,000	$     360,000
Total Collections	$    7,680,000	$    5,448,000	$    1,044,000	$    888,000	$     720,000

2.
c.

Purchase Budget
	January	February	March	April
Desired Ending Inventory	$        163,200	$       172,800	$          96,000	$     144,000
Add : Cost of Goods Sold	$        336,000	$       408,000	$        432,000	$     240,000
Total Needs	$        499,200	$       580,800	$        528,000	$     384,000
Less : Beginning Inventory	$        134,400	$       163,200	$        172,800	$       96,000
Total Purchases	$       364,800	$       417,600	$        355,200	$    288,000

d.

Cash disbursement for Purchases
	January	February	March	April
Cash paid for current month	$        182,400	$       208,800	$        177,600	$     144,000
Cash paid for prior month	$        146,400	$       182,400	$        208,800	$     177,600
Total Collections	$       328,800	$       391,200	$        386,400	$    321,600

3.
e.

Operating Expenses
	October	Novmeber	December
Salaries and Wages	$        135,000	$       135,000	$        135,000
Freight	$        100,800	$       122,400	$        129,600
Advertising	$        100,000	$       100,000	$        100,000
Depreciation	$          40,000	$          40,000	$          40,000
Other Expenses	$        126,000	$       153,000	$        162,000
Total Operating Expenses	$       501,800	$       550,400	$        566,600

f.

Disbursement for Operating Expenses
	October	Novmeber	December
Salaries and Wages	$        135,000	$       135,000	$        135,000
Freight	$        100,800	$       122,400	$        129,600
Advertising	$        100,000	$       100,000	$        100,000
Other Expenses	$        126,000	$       153,000	$        162,000
Total Disbursements	$       461,800	$       510,400	$        526,600

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