16 May Questionacct 212 homework 6 chapter 23
Question
Exercise 23-1 Preparation of merchandise purchases budgets (for three periods) L.O. P1
[The following information applies to the questions displayed below.]
| Formworks Company prepares monthly budgets. The current budget plans for a September ending inventory of 19,000 units. Company policy is to end each month with merchandise inventory equal to a specified percent of budgeted sales for the following month. Budgeted sales and merchandise purchases for the three most recent months follow. |
| Sales (Units) | Purchases (Units) | |
| July | 210,000 | 218,000 |
| August | 290,000 | 290,000 |
| September | 290,000 | 280,000 |
|
|
| Section Break | Difficulty: Medium | |
| Exercise 23-1 Preparation of merchandise purchases budgets (for three periods) L.O. P1 | Learning Objective: 23-P1 Prepare each component of a master budget and link each to the budgeting process. |
1.
award:
3 out of
3.00 points
Exercise 23-1 Part 1
| 1. | Prepare the merchandise purchases budget for the months of July, August, and September. (Input all amounts as positive values. Omit the “%” sign in your response.) |
| Worksheet | Difficulty: Medium | |
| Exercise 23-1 Part 1 | Learning Objective: 23-P1 Prepare each component of a master budget and link each to the budgeting process. |
2.
award:
1 out of
1.00 point
Exercise 23-1 Part 2
| 2. | Compute the ratio of ending inventory to the next month’s sales for each budget prepared in part 1.(Omit the “%” sign in your response.) |
| Ratio of ending inventory to next month sales | 10 % |
3.
award:
1 out of
1.00 point
Exercise 23-1 Part 3
| 3. | How many units are budgeted for sale in October? |
| Worksheet | Difficulty: Medium | |
| Exercise 23-1 Part 3 | Learning Objective: 23-P1 Prepare each component of a master budget and link each to the budgeting process. |
4.
award:
2.98 out of
3.00 points
Exercise 23-2 Preparation of cash budgets (for three periods) L.O. P1
| Kasik Co. budgeted the following cash receipts and cash disbursements for the first three months of next year. |
| Cash Receipts |
Cash Disbursements |
|||
| January | $ | 525,000 | $ | 477,000 |
| February | 403,500 | 354,000 | ||
| March | 478,000 | 522,000 | ||
|
|
| According to a credit agreement with the company’s bank, Kasik promises to have a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at an annual interest rate of 12%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. |
| Prepare monthly cash budgets for each of the first three months of next year. (Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.) |
| Worksheet | Difficulty: Medium | |
| Exercise 23-2 Preparation of cash budgets (for three periods) L.O. P1 | Learning Objective: 23-P1 Prepare each component of a master budget and link each to the budgeting process. |
5
award:
2 out of
2.00 points
Exercise 23-3 Preparation of a cash budget L.O. P1
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