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Problems: Set A
Req. 1
Cash Collections
January February March Quarter
Cash Sales (30%) $24,000 $27,600 $29,700 $81,300
Credit Sales (70%) $ 49,000 $ 56,000 $ 64,400 $ 169,400
Total Cash Collections $73,000 $83,600 $94,100 $250,700
Req. 2
Production Budget
January February March Quarter
Unit Sales* 8,000 9,200 9,900 27,100
Plus: Desired ending inventory 2,300 2,475 2,425 2,425
Total Needed 10,300 11,675 12,325 29,525
Less: Beginning inventory 2,000 2,300 2,475 2,000
Units to produce 8,300 9,375 9,850 27,525
Req. 3
April May
Unit Sales 9,700 8,500
Desired end inventory (10%) 850
Total needed 10,550
Beginning inventory 2,425
Units to produce 8,125
DM needed per unit 2
Dm need for production 16,250
20% of DM
Req. 4
Schedule of Expected Cash DisbursementsMaterial Purchases
January February March Quarter
December purchases (From Accounts Payable) $42,400 $42,400
January purchases $6,726 $5,381 $12,107
February purchases $7,538 $30,152 $37,690
March purchases $6,030.40 $6,030
Total cash payments for direct material
purchases $49,126 $12,919 $36,182 $98,227
Req. 5
Req. 6
Req. 7
Combined Cash Budget
January February March Quarter
Cash balance, beginning $4,500 $4,414 $26,645 $4,500
Add cash collections 73,000 83,600 94,100 250,700
Total cash available 77,500 88,014 120,745 255,200
Less cash payments
Direct material purchases 49,126 12,919 36,182 98,227
Conversion costs 17,960 19,250 19,820 57,030
Operating expenses 9,000 10,200 10,900 30,100
Equipment purchases 5,000 12,000 16,000 33,000
Tax payment 10,000 10,000
Total cash payments 81,086 64,369 82,902 228,357
Ending cash balance before financing -3,586 23,645 37,843 26,843
Financing:
Borrowings 8,000 3,000 11,000
Repayments -9,000 -9,000
Interest Payments -280 -280
Total financing 8,000 3,000 -9,280 1,720
Ending Cash balance $4,414 $26,645 $28,563 $28,563
Req. 8
Req. 9
Silverman Manufacturing
Budgeted Income Statement
For the Quarter Ended March 31
Sales $ 271,000
Cost of goods sold* -159,890
Gross profit 111,110
Operating expenses 30,100
Depreciation -4,800
Operating income 85,810
Less interest expense -280
Less provision for income taxes 26,023
Net income $59,507