Problem 9-13 (60 minutes)
1. Schedule of cash receipts:
Cash sales—June ............................................................
$ 60,000
Collections on accounts receivable:
May 31 balance ...........................................................
72,000
June (50% × 190,000) .................................................
95,000
Total cash receipts ..........................................................
$227,000
Schedule of cash payments for purchases:
May 31 accounts payable balance ....................................
$ 90,000
June purchases (40% × 200,000) ...................................
80,000
Total cash payments .......................................................
$170,000
PHOTOTEC, INC.
Cash Budget
For the Month of June
Cash balance, beginning .................................................
$ 8,000
Add receipts from customers (above) ..............................
227,000
Total cash available.........................................................
235,000
Less disbursements:
Purchase of inventory (above) ......................................
170,000
Operating expenses .....................................................
51,000
Purchases of equipment ...............................................
9,000
Total cash disbursements ................................................
230,000
Excess of receipts over disbursements .............................
5,000
Financing:
Borrowings—note ........................................................
18,000
Repayments—note .......................................................
(15,000)
Interest .......................................................................
(500)
Total financing ...............................................................
2,500
Cash balance, ending ......................................................
$ 7,500
Problem 9-13 (continued)
2.
PHOTOTEC, INC.
Budgeted Income Statement
For the Month of June
Sales .............................................................................$250,000
Cost of goods sold:
Beginning inventory .....................................................
$ 30,000
Add purchases .............................................................
200,000
Goods available for sale ...............................................
230,000
Ending inventory..........................................................
40,000
Cost of goods sold ....................................................... 190,000
Gross margin ................................................................. 60,000
Operating expenses ($51,000 + $2,000) .......................... 53,000
Net operating income ..................................................... 7,000
Interest expense ............................................................
500
Net income ....................................................................$ 6,500
3.
PHOTOTEC, INC.
Budgeted Balance Sheet
June 30
Assets
Cash ..............................................................................$ 7,500
Accounts receivable (50% × 190,000) ............................. 95,000
Inventory ....................................................................... 40,000
Buildings and equipment, net of depreciation
($500,000 + $9,000 – $2,000) ..................................... 507,000
Total assets ....................................................................$649,500
Liabilities and Equity
Accounts payable (60% × 200,000) ................................$120,000
Note payable.................................................................. 18,000
Capital stock .................................................................. 420,000
Retained earnings ($85,000 + $6,500) ............................ 91,500
Total liabilities and equity ................................................$649,500
Problem 9-18 (60 minutes)
1. a. Schedule of expected cash collections:
First
Year 2 Quarter
Second
Third
Fourth
Year 1—Fourth quarter sales:
$300,000 × 65% .........................................................
$195,000
Year 2—First quarter sales:
$400,000 × 33% .........................................................
132,000
$400,000 × 65% .........................................................
$260,000
Year 2—Second quarter sales:
$500,000 × 33% .........................................................
165,000
$500,000 × 65% ......................................................... $325,000
Year 2—Third quarter sales:
$600,000 × 33% ......................................................... 198,000
$600,000 × 65% .........................................................
$390,000
Year 2—Fourth quarter sales:
$480,000 × 33% .........................................................
158,400
Total cash collections ......................................................
$327,000 $425,000 $523,000 $548,400
Problem 9-18 (continued)
b. Schedule of budgeted cash disbursements for merchandise
purchases:
First
Year 2 Quarter
Second
Third
Fourth
Year 1—Fourth quarter purchases:
$180,000 × 80% .........................................................
$144,000
Year 2—First quarter purchases:
$260,000 × 20% .........................................................
52,000
$260,000 × 80% .........................................................
$208,000
Year 2—Second quarter purchases:
$310,000 × 20% .........................................................
62,000
$310,000 × 80% ......................................................... $248,000
Year 2—Third quarter purchases:
$370,000 × 20% .........................................................
74,000
$370,000 × 80% .........................................................
$296,000
Year 2—Fourth quarter purchases:
$240,000 × 20% .........................................................
48,000
Total cash disbursements ................................................
$196,000 $270,000 $322,000 $344,000
Problem 9-18 (continued)
2.
First
Year 2 Quarter
Second
Third
Fourth
Budgeted sales...............................................................
$400,000 $500,000 $600,000 $480,000
Variable expense rate .....................................................
× 12%
× 12%
× 12%
× 12%
Variable expenses...........................................................
48,000
60,000
72,000
57,600
Fixed expenses ..............................................................
90,000
90,000
90,000
90,000
Total expenses ...............................................................
138,000 150,000 162,000 147,600
Less depreciation ...........................................................
20,000
20,000
20,000
20,000
Cash disbursements .......................................................
$118,000 $130,000 $142,000 $127,600
Year
$1,980,
×1
237,
360,
597,
80,
$ 517,
Problem 9-18 (continued)
3. Cash budget for Year 2:
First
Year 2 Quarter
Second
Third
Fourth
Cash balance, beginning ...................................................
$ 20,000 $ 23,000 $ 18,000 $ 18,500
Add collections from sales .................................................
327,000 425,000
523,000 548,400
Total cash available ...........................................................
347,000 448,000
541,000 566,900
Less disbursements:
Merchandise purchases ..................................................
196,000 270,000
322,000 344,000
Operating expenses .......................................................
118,000 130,000
142,000 127,600
Dividends ......................................................................
10,000
10,000
10,000
10,000
Land..............................................................................
0
80,000
48,500
0
Total disbursements ..........................................................
324,000 490,000
522,500 481,600
Excess (deficiency) of receipts over
disbursements .............................................................
23,000 (42,000)
18,500
85,300
Financing:
Borrowings ....................................................................
0
60,000
0
0
Repayments...................................................................
0
0
0 (60,000)
Interest* .......................................................................
0
0
0
(4,500)
Total financing ..................................................................
0
60,000
0 (64,500)
Cash balance, ending ........................................................
$ 23,000 $ 18,000 $ 18,500 $ 20,800
*60,000 × 10% × 9/12 = $4,500.