Question

Wolfpack Company is a merchandising company that is preparing a budget for the month of July....

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information:

Wolfpack Company
Balance Sheet
June 30
Assets
Cash $ 79,200
Accounts receivable 68,600
Inventory 40,200
Buildings and equipment, net of depreciation 213,000
Total assets $ 401,000
Liabilities and Stockholders’ Equity
Accounts payable $ 56,000
Common stock 100,000
Retained earnings 245,000
Total liabilities and stockholders’ equity $ 401,000

Budgeting Assumptions:

All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July.

All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase.

The budgeted inventory balance at July 31 is $25,700.

Depreciation expense is $4,260 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred.

The company’s cash budget for July shows expected cash collections of $106,100, expected cash disbursements for merchandise purchases of $68,100, and cash paid for selling and administrative expenses of $20,740.

Required:

1. For the month of July, calculate the following:

a. Budgeted sales

b. Budgeted merchandise purchases

c. Budgeted cost of goods sold

d. Budgeted net operating income

2. Prepare a budgeted balance sheet as of July 31.

Homework Answers

Answer #1

a) Calculation of Budgeted Sales -

Total Cash Collections for July (Budgeted) - $ 1,06,100

Less: Accounts receivable of June received in July - $ 68,600

Amount received of July Sales (30%) - $ 37,500

Therefore, Budgeted Sales of July = 37500*100/30 = $ 1,25,000

b) Budgeted Merchandise Purchases -

Expected Cash Disursements for Merchandise Purchase = $ 68,100

Less : Bills Payable of June paid in July = $ 56,000

Cash Payment for July Purchases (20%) = $ 12,100

Therefore, Total Budgeted Merchandise Purchases for July = $12100*100/20

= $ 60,500

c) Budgeted Cost of Goods Sold = Opening Stock + Budgeted Purchases - Closing Inventory

= 40,200 + 60,500 - 25,700

= $ 75,000

d) Budgeted Net Operating Income = Budgeted Revenue - Budgeted Expenses

= (1,06,100) - (68100+20740+4260)

= $ 13,000

e) Budgeted Balance Sheet as of July 31 -

Attached Worksheet

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 60,000 Accounts receivable 30,000 Inventory 43,900 Buildings and equipment, net of depreciation 131,000 Total assets $ 264,900 Liabilities and Stockholders’ Equity Accounts payable $ 72,000 Common stock 70,000 Retained earnings 122,900 Total liabilities and stockholders’ equity $ 264,900 Budgeted Income Statements April May June Sales $ 113,000 $...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Deacon Company Balance Sheet March 31 Assets Cash $ 55,000 Accounts receivable 36,000 Inventory 40,000 Buildings and equipment, net of depreciation 100,000 Total assets $ 231,000 Liabilities and Stockholders’ Equity Accounts payable $ 51,300 Common stock 70,000 Retained earnings 109,700 Total liabilities and stockholders’ equity $ 231,000 Budgeted Income Statements April May June Sales $ 100,000 $...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended...
Deacon Company is a merchandising company that is preparing a budget for the three-month period ended June 30th. The following information is available Assets Cash $ 60,200 Accounts receivable 30,800 Inventory 60,400 Buildings and equipment, net of depreciation 124,000 Total assets $ 275,400 Liabilities and Stockholders’ Equity Accounts payable $ 71,100 Common stock 70,000 Retained earnings 134,300 Total liabilities and stockholders’ equity $ 275,400 Budgeted Income Statements April May June Sales $ 168,000 $ 178,000 $ 198,000 Cost of goods...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 83,000 Accounts receivable 126,000 Inventory 69,750 Plant and equipment, net of depreciation 220,000 Total assets $ 498,750 Liabilities and Stockholders’ Equity Accounts payable $ 81,000 Common stock 348,000 Retained earnings 69,750 Total liabilities and stockholders’ equity $ 498,750 Exercise 8-12...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 85,000 Accounts receivable 141,000 Inventory 83,250 Plant and equipment, net of depreciation 226,000 Total assets $ 535,250 Liabilities and Stockholders’ Equity Accounts payable $ 87,000 Common stock 350,000 Retained earnings 98,250 Total liabilities and stockholders’ equity $ 535,250 Exercise 8-12...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter...
Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Beech Corporation Balance Sheet June 30 Assets Cash $ 75,000 Accounts receivable 140,000 Inventory 66,500 Plant and equipment, net of depreciation 227,000 Total assets $ 508,500 Liabilities and Stockholders’ Equity Accounts payable $ 88,000 Common stock 311,000 Retained earnings 109,500 Total liabilities and stockholders’ equity $ 508,500 Exercise 8-12...
Hamby Corporation is a merchandising company that is preparing a master budget for the third quarter...
Hamby Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Hamby Corporation Balance Sheet June 30 Assets Cash $ 76,000 Accounts receivable 137,000 Inventory 86,100 Plant and equipment, net of depreciation 230,000 Total assets $ 529,100 Liabilities and Stockholders’ Equity Accounts payable $ 91,000 Common stock 312,000 Retained earnings 126,100 Total liabilities and stockholders’ equity $ 529,100 The company...
Cousins Corporation is a merchandising company that is preparing a master budget for the third quarter...
Cousins Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: Cousins Corporation Balance Sheet June 30 Assets Cash $ 81,000 Accounts receivable 132,000 Inventory 56,250 Plant and equipment, net of depreciation 214,000 Total assets $ 483,250 Liabilities and Stockholders’ Equity Accounts payable $ 75,000 Common stock 346,000 Retained earnings 62,250 Total liabilities and stockholders’ equity $ 483,250 The company...
Brothers Corporation is a merchandising company that is preparing a master budget for the third quarter...
Brothers Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below: brothers Corporation Balance Sheet June 30 Assets Cash $ 81,000 Accounts receivable 132,000 Inventory 56,250 Plant and equipment, net of depreciation 214,000 Total assets $ 483,250 Liabilities and Stockholders’ Equity Accounts payable $ 75,000 Common stock 346,000 Retained earnings 62,250 Total liabilities and stockholders’ equity $ 483,250 The company...
Millen Corporation is a merchandiser that is preparing a master budget for the month of July....
Millen Corporation is a merchandiser that is preparing a master budget for the month of July. The company’s balance sheet as of June 30th is shown below: Millen Corporation Balance Sheet June 30 Assets Cash $ 120,000 Accounts receivable 166,000 Inventory 37,200 Plant and equipment, net of depreciation 554,800 Total assets $ 878,000 Liabilities and Stockholders’ Equity Accounts payable $ 93,000 Common stock 586,000 Retained earnings 199,000 Total liabilities and stockholders’ equity $ 878,000 Millen’s managers have made the following...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT