Student Name: Instructor Class: McGraw-Hill/Irwin Problem 07-20A 1. PHOTOTEC, INC.

Schedule of cash receipts: Cash sales-June Collections on accounts receivable: May 31 balance June Total cash receipts Schedule of cash payments for purchases: May 31 accounts payable balance June purchases Total cash payments

60,000

72,000 95,000 $ 227,000 Correct! $ 90,000 80,000 $ 170,000 Correct!

PHOTOTEC, INC. Cash Budget For the Month of June Cash balance, beginning Add receipts from customers Total cash available Less disbursements: Purchase of inventory Selling and administrative expenses Purchases of equipment Total cash disbursements Excess of receipts over disbursements Financing: Borrowings-note Repayments-note Interest Total financing Cash balance, ending $ 8,000 227,000 235,000 170,000 51,000 9,000 230,000 5,000 18,000 (15,000) (500) 2,500 $ 7,500 Correct!

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 07-20A

2. PHOTOTEC, INC. Budgeted Income Statement For the Month of June Sales Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income $ $ 30,000 200,000 230,000 40,000 190,000 60,000 53,000 7,000 500 $ 6,500 Correct! 250,000

3. PHOTOTEC, INC. Budgeted Balance Sheet June 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Equity Accounts payable Note payable Capital stock Retained earnings Total liabilities and equity $ 7,500 95,000 40,000 507,000 649,500

120,000 18,000 420,000 91,500 $ 649,500 Correct!

Given Data P07-20A: PHOTOTEC, INC. Balance Sheet May 31 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Note payable Capital stock Retained earnings Total liabilities and stockholders' equity Budgeted Data relating to June: Budgeted sales Budgeted sales in cash (remainder credit) Percent of credit sales collected in same month May accounts receivable collected Expected inventory purchases Purchases paid for in cash in month purchased May accounts payable paid Budgeted inventory balance, June 30 Budgeted selling and administrative expenses Budgeted depreciation Existing note payable paid Interest expense Equipment purchases New note

8,000 72,000 30,000 500,000 610,000

90,000 15,000 420,000 85,000 610,000

$ $

$ $ $ $ $ $

250,000 60,000 50% 100% 200,000 40% 100% 40,000 51,000 2,000 100% 500 9,000 18,000

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 07-23A UNIVAX, INC. 1a. Schedule of expected cash collections: Year 2 Quarter Second Third $ 260,000 165,000

Year 1 - Fourth quarter sales: Year 2 - First quarter sales: Year 2 - Second quarter sales: Year 2 - Third quarter sales: Year 2 - Fourth quarter sales: Total cash collections

First 195,000 132,000

Fourth

325,000 198,000 523,000 Correct!

327,000 Correct!

425,000 Correct!

390,000 158,400 $ 548,400 Correct!

Total 195,000 392,000 490,000 588,000 158,400 $ 1,823,400 Correct! $

1b. Schedule of budgeted cash disbursements for merchandise purchases: Year 2 Quarter Second Third $ 208,000 62,000

Year 1 - Fourth quarter purchases: Year 2 - First quarter purchases: Year 2 - Second quarter purchases: Year 2 - Third quarter purchases: Year 2 - Fourth quarter purchases: Total cash disbursements

First 144,000 52,000

Fourth

248,000 74,000 322,000 Correct!

196,000 Correct!

270,000 Correct!

296,000 48,000 $ 344,000 Correct!

Total 144,000 260,000 310,000 370,000 48,000 $ 1,132,000 Correct! $

2. Budgeted selling and administrative expenses: Year 2 Quarter First Second Third Fourth Year $ 400,000 $ 500,000 $ 600,000 $ 480,000 $ 1,980,000 12% 12% 12% 12% 12% $ 48,000 $ 60,000 $ 72,000 $ 57,600 $ 237,600 90,000 90,000 90,000 90,000 360,000 138,000 150,000 162,000 147,600 597,600 20,000 20,000 20,000 20,000 80,000 $ 118,000 $ 130,000 $ 142,000 $ 127,600 $ 517,600 Correct! Correct! Correct! Correct! Correct!

Budgeted sales Variable expense rate Variable expenses Fixed expenses Total expenses Less depreciation Cash disbursements

3. Cash budget for Year 2: Year 2 Quarter Second Third $ 23,000 $ 18,000 425,000 523,000 448,000 541,000 270,000 130,000 10,000 80,000 490,000 (42,000) 60,000 60,000 $ 18,000 Correct! 322,000 142,000 10,000 48,500 522,500 18,500

Cash balance, beginning Add collections from sales Total cash available Less disbursements: Merchandise purchases Operating expenses Dividends Land Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, ending

First 20,000 327,000 347,000 196,000 118,000 10,000 324,000 23,000

Fourth 18,500 548,400 566,900 344,000 127,600 10,000 481,600 85,300

Year 20,000 1,823,400 1,843,400 1,132,000 517,600 40,000 128,500 1,818,100 25,300

$ 23,000 Correct!

18,500 Correct!

60,000 (60,000) (60,000) (5,400) (5,400) (65,400) (5,400) $ 19,900 $ 19,900 Correct! Correct!

Given Data P07-23A: UNIVAX, INC. Budgeted Sales and Merchandise Purchases: Merchandise Purchases $ $ $ $ $ 180,000 260,000 310,000 370,000 240,000

Sales Year 1: Fourth quarter actual Year 2: First quarter estimated Second quarter estimated Third quarter estimated Fourth quarter estimated $ $ $ $ $ 300,000 400,000 500,000 600,000 480,000

Additional information: Percentage of sales collected in same quarter Percentage of sales collected in quarter following sales Percentage of sales deemed uncollectible Percentage of merchandise purchases paid in same quarter Percentage of merchandise purchases pain in following quarter Budgeted quarterly operating expenses for Year 2 plus percentage of sales Amount of depreciation budgeted each quarter Dividends to be paid each quarter Cash purchase of land in second quarter Cash purchase of land in third quarter Cash account balance at end of Year 1 Minimum cash balance required Bank loan borrowing increments Maximum loan balance allowed Interest rate per month on bank loans Current outstanding loan balance

$ $ $ $ $ $ $ $ $ $

33% 65% 2% 20% 80% 90,000 12% 20,000 10,000 80,000 48,500 20,000 18,000 10,000 100,000 1.0% -

Student Name: Instructor Class: McGraw-Hill/Irwin 07-Case CRAVAT SALES COMPANY Budgets April 1a. Sales budget: Budgeted sales in units Selling price per unit Total sales 1b. Schedule of expected cash collections: February sales March sales April sales May sales June sales Total cash collections 1c. Merchandise purchases budget: Budgeted sales in units Add budgeted ending inventory Total needs Less beginning inventory Required unit purchases Unit cost Required dollar purchases 35,000 8 280,000 Correct! 48,000 112,000 70,000 May 45,000 8 360,000 Correct! June 60,000 8 480,000 Correct! Quarter 140,000 $ 8 $ 1,120,000 Correct! $ 56,000 140,000 90,000 $ 286,000 Correct! $ 70,000 180,000 120,000 $ 370,000 Correct! 60,000 36,000 96,000 54,000 42,000 $ 5 $ 210,000 Correct! 48,000 168,000 280,000 270,000 120,000 $ 886,000 Correct! 140,000 36,000 176,000 31,500 144,500 $ 5 $ 722,500 Correct! $ $ 110,000 146,250 256,250 Correct! $ 146,250 105,000 $ 251,250 Correct! 85,750 220,000 292,500 105,000 $ 703,250 Correct!

$ $

$ $

$ $

230,000 Correct!

35,000 40,500 75,500 31,500 44,000 $ 5 $ 220,000 Correct! 1d. Budgeted cash disbursements for merchandise purchases: March purchases $ 85,750 April purchases 110,000 May purchases June purchases Total cash payments $ 195,750 Correct! 2.

45,000 54,000 99,000 40,500 58,500 $ 5 $ 292,500 Correct!

CRAVAT SALES COMPANY Cash Budget For the Three Months Ending June 30 April 14,000 230,000 244,000 195,750 35,000 22,000 14,000 3,000 12,000 281,750 (37,750) 48,000 May 10,250 286,000 296,250 256,250 45,000 22,000 14,000 3,000 25,000 365,250 (69,000) 79,000 June 10,000 370,000 380,000 251,250 60,000 22,000 14,000 3,000 350,250 29,750 Quarter 14,000 886,000 900,000 703,250 140,000 66,000 42,000 9,000 12,000 25,000 997,250 (97,250)

Cash balance, beginning Add receipts from customers Total cash available Less disbursements: Purchase of inventory Sales commissions Salaries and wages Utilities Miscellaneous Dividends paid Land purchases Total disbursements Excess (deficiency) of receipts over disbursements Financing: Borrowings Repayments Interest Total financing Cash balance, ending

48,000 10,250 Correct!

79,000 10,000 Correct!

127,000 (16,000) (16,000) (3,020) (3,020) (19,020) 107,980 $ 10,730 $ 10,730 Correct! Correct!

Student Name: Instructor Class: McGraw-Hill/Irwin 07-Case

3. CRAVAT SALES COMPANY Budgeted Income Statement For the Three Months Ended June 30 Sales in units Sales revenue Variable expenses: Cost of goods sold Commissions Contribution margin Fixed expenses: Wages and salaries Utilities Insurance expired Depreciation Miscellaneous Net operating income Less interest expense Net income 140,000 $ 1,120,000 $ 700,000 140,000

840,000 280,000

66,000 42,000 3,600 4,500 9,000

125,100 154,900 3,020 $ 151,880 Correct!

4. CRAVAT SALES COMPANY Budgeted Balance Sheet June 30 Assets Cash Accounts receivable Inventory Unexpired insurance Fixed assets, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable, purchases Dividends payable Loans payable, bank Capital stock, no par Retained earnings Total liabilities and equity Accounts receivable at June 30: May sales June sales Total Retained earnings at June 30: Balance, March 31 Add net income Total Less dividends declared Balance, June 30 $ 10,730 450,000 180,000 10,800 193,200 $ 844,730 Correct! $ 105,000 12,000 111,000 300,000 316,730 $ 844,730 Correct! $ 90,000 360,000 $ 450,000 Correct! $ 176,850 151,880 328,730 12,000 $ 316,730 Correct!

Given Data 07-Case: CRAVAT SALES COMPANY Minimum ending monthly cash balance Selling price Recent and forecast sales (in units): January (actual) February (actual) March (actual) April May June July August September Desired ending inventories (percentage of next month's sales) Cost of earrings Purchases paid as follows: In month of purchase In following month Collection on sales: Sales collected current month Sales collected following month Sales collected 2nd month following Monthly selling and administrative expenses: Variable: Sales commissions (per tie) Fixed: Wages and salaries Utilities Insurance Depreciation Miscellaneous Land purchased in May Dividends declared each quarter $ $ 10,000 8

20,000 24,000 28,000 35,000 45,000 60,000 40,000 36,000 32,000

90% 5

50% 50%

25% 50% 25%

1.00

$ $ $ $ $ $ $

22,000 14,000 1,200 1,500 3,000 25,000 12,000

Given Data 07-Case: Balance sheet at March 31: Assets Cash Accounts receivable February sales March sales Inventory (31,500 units) Prepaid insurance Fixed assets, net of depreciation Total assets $ $ 48,000 168,000 14,000

216,000 157,500 14,400 172,700 574,600

Liabilities and Stockholders' Equity Accounts payable Dividends payable Common stock Retained earnings Total liabilities and stockholders' equity Agreement with Bank: Borrowing increments Maximum borrowing amount Interest rate per month Repayment increments Total of interest paid each quarter Required minimum cash balance

85,750 12,000 300,000 176,850 574,600

$ $ $ $

1,000 140,000 1% 1,000 100% 10,000