Muhammad Abdul Rehman Walija

49691
Management Accounting
Assignment
 Problem 2-11
Page 63

a)
Mason Company
Schedule of Goods Manufacturing

Direct Materials:
Beg Raw Material inventory $ 7,000.00
Add: Purchases of raw materials $ 118,000.00
Raw materials available for use $ 125,000.00
Deduct: Ending raw materials inventory $ (15,000.00)
Raw Materials used in Production $ 110,000.00
Direct labor $ 70,000.00
Manufacturing Overhead $ 80,000.00
Total manufacturing costs $ 260,000.00
Add: Beginning Work in Process inventory $ 10,000.00
Less: Ending Work in process inventory $ (5,000.00)
Cost of Goods Manufactured $ 265,000.00

b)
Mason Company
Schedule of Cost of Goods Sold

Beginning Finished goods Inventory $ 20,000.00

Add: COGM $ 265,000.00
Goods available for sale $ 285,000.00
Less: Ending Finished Goods Inventory $ (35,000.00)
Cost of Goods Sold $ 250,000.00
 Problem 2-12
Page 64
a)

a) Raw Materials (8000-7600)*10 $ 4,000.00

b)Work In Process 7500*10*10% $ 7,500.00
c)FG 7500*10*90%*30% $ 20,250.00
d)COGS 7500*10*90%*70% $ 47,250.00
e) Selling Expense 100*10 $ 1,000.00

Total batteries purchased $ 80,000.00

b)

Raw Materials Balance Sheet

FG Balance Sheet
WIP Balance Sheet
COGS Income Statement
Selling Expenses Income Statement

Problem 2-16
 Page 66
a)
Schedule of Cost of Goods Manufactured
Swift Company

Beginning raw material $ 8,000.00

Add Purchase of raw material $ 165,000.00
Total $ 173,000.00
Less Ending Raw material $ (13,000.00)
Raw material used in production $ 160,000.00
Direct labor $ 70,000.00
Manufacturing overheads $ 85,000.00
Total manufacturing cost $ 315,000.00
Add Beginning work in progress $ 16,000.00
Less Ending WIP $ (21,000.00)
Cost of goods manufactured $ 310,000.00

b)
Income Statement
Swift Company
Sales revenue $ 490,000.00
Less cost of goods sold
Cost of goods manufactured $ 310,000.00
Add Beginning finished goods inventory $ 40,000.00
Cost of goods available for sale $ 350,000.00
Less Ending finished goods inventory $ (60,000.00)
less COGS $ (290,000.00)
Gross profit $ 200,000.00
Less Operating expense
Selling and admin Expenses $ 142,000.00
Total O.E $ (142,000.00)
Net operating income $ 58,000.00

c) No, I think; looking at the calculated schedule and Income statement, the company is in profit.
The previous accountant calculations were wrong. There is no need to look for a buyer, as we are
economically positive.
Problem 2-18
 Page 67
1.
Meriwell Company
Schedule of Cost of Goods Manufacturing

Direct Materials:
Beg Raw Material inventory $ 9,000.00
Add: Purchases of raw materials $ 125,000.00
Raw materials available for use $ 134,000.00
Deduct: Ending raw materials inventory $ (6,000.00)
Raw Materials used in Production $ 128,000.00
Direct labor $ 70,000.00
Manufacturing Overhead $ 105,000.00
Total manufacturing costs $ 303,000.00
Add: Beginning Work in Process inventory $ 17,000.00
Less: Ending Work in process inventory $ (30,000.00)
Cost of Goods Manufactured $ 290,000.00

2.
Income Statement
Meriwell Company
Sales revenue $ 500,000.00
Less cost of goods sold
Cost of goods manufactured $ 290,000.00
Add Beginning finished goods inventory $ 20,000.00
Cost of goods available for sale $ 310,000.00
Less Ending finished goods inventory $ (40,000.00)
less COGS $ (270,000.00)
Gross profit $ 230,000.00
Less Operating expense
Selling Expenses $ 80,000.00
Adminstrative Expenses 110000
Total O.E $ (190,000.00)
Net operating income $ 40,000.00

3.
Direct Materials:
Beg Raw Material inventory $ 9,000.00
Add: Purchases of raw materials $ 125,000.00
Raw materials available for use $ 134,000.00
Deduct: Ending raw materials inventory $ (6,000.00)
Raw Materials used in Production $ 128,000.00

Number of units produced 10000.00

Cost of Raw Materials used $ 128,000

Average Cost per unit for D. M = =
Number of units produced 10,000
Average Cost per unit for Direct Materials= $12.8

¿ Manufacturing overhead $ 90,000

Average Cost per unit for ¿ Manufacturing overhead= =
Number of units produced 10,000
Average Cost per unit for Fixed Manufacturing Overhead = $9

4.
Average Cost per unit for Direct Materials = $12.8
Number of Units expected to be produced = 15,000

Total cost for Direct Material when15,000 units are produced=$ 12.80∗15000
= $192,000

Fixed cost does not change with the change in production. So, the manufacturing cost will be $90,000 for
either 10,000 or 15,000 units are produced.

5.
When the production is increased from 10,000 units to 15,000 units, the average cost per unit decreased.
Because when we look at the formula the number of units are inversely proportional to average cost per
unit.
¿ MOH
Average cost per unit=
Number of units Produced
1
Average cost per unit ∝
Number of Units Produced

Problem 2-21
 Page 69
1.

Superior Company
Schedule of Cost of Goods Sold

Direct Materials:
Beg Raw Material inventory $ 40,000.00
Add: Purchases of raw materials $ 290,000.00
Raw materials available for use $ 330,000.00
Deduct: Ending raw materials inventory $ (10,000.00)
Raw Materials used in Production $ 320,000.00
Direct labor $ 93,000.00
Manufacturing Overhead $ 270,000.00
Total manufacturing costs $ 683,000.00
Add: Beginning Work in Process inventory $ 648,000.00 $ 20,000.00
Less: Ending Work in process inventory $ (35,000.00)
Cost of Goods Manufactured $ 668,000.00
Add Opening FG $ 50,000.00
2.
DM used $ 320,000
Average cost of DM used= = =$ 8 per unit
Number of units 40,000
ManufacturingOverhead $ 270,000
Average cost of ManufacturingOverhead= = =$ 6.75 per unit
Number of units 40,000

3.

Total cost of DM =Cost per unit of DM∗Number of units ¿ be produced=$ 8∗50,000=$ 40,000
If manufacturing overhead, if treated same as fixed cost; then there will be no change in manufacturing
overhead. I.e., $270,000.
ManufacturingOverhead $ 270,000
Average cost per unit of ManufacturingOverhead= = =$ 5.4 per unit
Number of units 50,000

4.
There will be no change in direct material cost per unit as materials are treated as variable costs and
variable costs per unit is always fixed.
There will be no change in the manufacturing overhead cost per unit as it is treated as fixed cost. The
fixed cost per unit varies with the change of production as the manufacturing cost per unit has decreased
from $6.75 to $5.4 per unit due to decrease in the production from 40,000 to 50,000.

Problem 2-24
Page 70

1.
Visic Corporation
Schedule of Cost of Goods Manufacturing

Direct Materials:
Beg Raw Material inventory $ 20,000.00
Add: Purchases of raw materials $ 480,000.00
Raw materials available for use $ 500,000.00
Deduct: Ending raw materials inventory $ (30,000.00)
Raw Materials used in Production $ 470,000.00
Direct labor $ 90,000.00
Manufacturing Overhead $ 300,000.00
Total manufacturing costs $ 860,000.00
Add: Beginning Work in Process inventory $ 50,000.00
Less: Ending Work in process inventory $ (40,000.00)
Cost of Goods Manufactured $ 870,000.00

2. (a)
Beg. Finished goods units $ -
Add Units produced $ 29,000.00
Goods available for sale $ 29,000.00
less: Units Sold 1300000/50 $ (26,000.00)
Ending Finished Goods(units) $ 3,000.00

(b)

COGM $ 870,000.00
Units produced 29000
Unit price $ 30.00
Ending inventory (units) 30000
Ending inventory(in dollars ) $ 900,000.00

3.
 Income Statement
Visic Corporation

Sales revenue $ 1,300,000.00

Less cost of goods sold
Cost of goods manufactured $ 870,000.00
Add Beginning finished goods inventory $ -
Cost of goods available for sale $ 870,000.00
Less Ending finished goods inventory $ (90,000.00)
less COGS $ (780,000.00)
Gross profit $ 520,000.00
Less Operating expense
Selling and Adminstrative Expense Salaries $ 210,000.00
Other Selling and Adminstrative Expenses $ 17,000.00
Advertising $ 105,000.00
Entertainment and travel $ 40,000.00
Building rent $ 8,000.00
Total O.E $ (380,000.00)

Problem 2-25
Page 71
Schedule Of CGM 1 2 3 4
DM $4,500.00 $6,000.00 $5,000.00 $3,000.00
DL $9,000.00 $3,000.00 $7,000.00 $4,000.00
MOH $5,000.00 $4,000.00 $8,000.00 $9,000.00
TMC $18,500.00 $13,000.00 $20,000.00 $16,000.00
Beg. WIP inventory $2,500.00 $15,000.00 $3,000.00 $4,500.00
Ending WIP inventory -$3,000.00 -$1,000.00 -$4,000.00 -$3,000.00
COGM $18,000.00 $14,000.00 $19,000.00 $17,500.00

Income Statement
Sales $30,000.00 $21,000.00 $36,000.00 $40,000.00
Beg. FG inventory $1,000.00 $2,500.00 $3,500.00 $2,000.00
COGM $18,000.00 $14,000.00 -$19,000.00 $17,500.00
Goods available for sale $19,000.00 $16,500.00 $22,500.00 $19,500.00
Ending FG inventory -$2,000.00 -$1,500.00 -$4,000.00 -$3,500.00
COGS $17,000.00 $15,000.00 $18,500.00 $16,000.00
Gross Margin $13,000.00 $6,000.00 $17,500.00 $24,000.00
Selling and adminisrative expenses -$9,000.00 -$3,500.00 -$12,500.00 -$15,000.00
Net operating income $4,000.00 $2,500.00 $5,000.00 $ 9,000.00

Problem 2-27
Page 72
1.
The problem or error on the income statement was to consider selling and administrative expenses in the
account of operating expenses. As the Operating loss is basically the difference between the company
revenue and its operating expenses.

2.
 Solar Technology Inc.
Schedule of Cost of Goods Manufacturing

Direct Materials:
Beg Raw Material inventory $ -
Add: Purchases of raw materials $ 360,000.00
Raw materials available for use $ 360,000.00
Deduct: Ending raw materials inventory $ (10,000.00)
Raw Materials used in Production $ 350,000.00
Direct labor $ 70,000.00
Manufacturing Overhead $ 410,000.00
Total manufacturing costs $ 830,000.00
Add: Beginning Work in Process inventory $ -
Less: Ending Work in process inventory $ (50,000.00)
Cost of Goods Manufactured $ 780,000.00

3.
Income Statement
 Solar Technology Inc.

Sales revenue $ 960,000.00

Less cost of goods sold
Cost of goods manufactured $ 780,000.00
Add Beginning finished goods inventory $ -
Cost of goods available for sale $ 780,000.00
Less Ending finished goods inventory $ (156,000.00)
less COGS $ (624,000.00)
Gross profit $ 336,000.00
Less Operating expense
Selling and Adminstrative Expense Salaries $ 290,000.00
Total O.E $ (290,000.00)
Net operating income $ 46,000.00

Ending Inventory:

4.

Ending Raw materials $ 10,000.00

Ending WIP $ 50,000.00
Ending Finished Goods $ 156,000.00
Total inventory $ 216,000.00

Problem 7-1
 Page 294
1.
DM IDR 100.00
DL IDR 320.00
Variable Manufacturing Overhead IDR 40.00
Variable Costs per unit
Fixed Manufacturing Overhead 60000/250 IDR 240.00
IDR 700.00

Unit Cost of Production by using Absorption Costing= IDR 700.00

2.
DM IDR 100.00
DL IDR 320.00
Variable Manufacturing Overhead IDR 40.00
IDR 460.00

Unit Cost of Production by using Variable Costing= IDR 460.00

Problem 7-5
 Page 296
1. (a)
DM $ 6.00
DL $ 9.00
Variable Manufacturing Overhead $ 3.00
Variable Costs per unit
Fixed Manufacturing Overhead 300000/25000 $ 12.00
$ 30.00

Unit Cost of Production by using Absorption Costing= $ 30.00

(b)
Lynch Company
Absorption Costing Income Statement
For the Year Ended

Sales revenue $ 1,000,000.00

Less cost of goods sold
Cost of goods manufactured $ 750,000.00
Add Beginning finished goods inventory $ -
Cost of goods available for sale $ 750,000.00
Less Ending finished goods inventory $ (150,000.00)
less COGS $ (600,000.00)
Gross profit $ 400,000.00
Less Operating expense
Selling and Adminstrative Expense
Fixed Selling and Adminstrative $ 19,000.00
Variable Selling and Adminstrative $ 80,000.00
Total O.E $ (99,000.00)
Net operating income $ 301,000.00

2. (a)
 DM $ 6.00
DL $ 9.00
Variable Manufacturing Overhead $ 3.00
$ 18.00

Unit Cost of Production by using Variable Costing= $ 18.00

(b)
Lynch Company
Variable Costing Income Statement
For the Year Ended

Sales revenue $ 1,000,000.00

Less Variable Costing
COGS $ 450,000.00
Variable Selling and Adminstrative $ 80,000.00 $ (530,000.00)
Contribution Margin $ 470,000.00
less Fixed Cost
Fixed Manufacturing Overhead $ 300,000.00
Fixed Selling and Adminstrative $ 190,000.00 $ (490,000.00)
Net operating income $ (20,000.00)

Problem 7-11
 Page 298
1.

Heaton Company
Variable Costing Income Statement
For the Year Ended

Year 1 Year 2
Sales revenue $ 1,000,000.00 $ 1,250,000.00
Less Variable Costing
COGS $ 480,000.00 $ 600,000.00
Variable Selling and Adminstrative $ 80,000.00 $ (560,000.00) $ 100,000.00 $ (700,000.00)
Contribution Margin $ 440,000.00 $ 550,000.00
less Fixed Cost
Fixed Manufacturing Overhead $ 270,000.00 $ 270,000.00
Fixed Selling and Adminstrative $ 130,000.00 $ (400,000.00) $ 130,000.00 $ (400,000.00)
Net operating income $ 40,000.00 $ 150,000.00

2.
Year 1

Units∈endinginventory =¿¿ 5,000 units

¿ Manufacturing Overhead deferred =¿ MOH ∈ending inventory−¿ MOH ∈beigining Inventory=( 5,000∗6 )−$ 0
¿ $ 30,000

Variable net operating income $ 40,000.00

Add Fixed MOH deferred $ 30,000.00
Absorption costing net operating income $ 70,000.00

Year 2

Units∈ending inventory =¿¿ 0 unit

¿ Manufacturing Overhead deferred =¿ MOH ∈ending inventory−¿ MOH ∈beigining Inventory=$ 0−( 5,000∗6 )
¿−$ 30,000
Variable net operating income $ 150,000.00
Add Fixed MOH deferred $ -
less Fixed MOH in beginning $ (30,000.00)
Absorption costing net operating income $ 120,000.00

Problem 9-15
Page 402
a.
Pearl Products Limited
Production Budget

Particulars July August September October November

Budgeted Unit sales $ 35,000.00 $ 40,000.00 $ 50,000.00 $ 30,000.00 $ 20,000.00
Add: Desired Ending inventory $ 11,000.00 $ 13,000.00 $ 9,000.00 $ 7,000.00
Total Needs $ 46,000.00 $ 53,000.00 $ 59,000.00 $ 37,000.00
Less Beginning Inventory $ (10,000.00) $ (11,000.00) $(13,000.00) $ (9,000.00)
Required production in units $ 36,000.00 $ 42,000.00 $ 46,000.00 $ 28,000.00

b.
In July and August, the Required Production is more than the Budgeted units’ sales. That’s why company
may have to make higher units than the budgeted sales.
In September and October, the Required Production is less than the Budgeted unit’s sale. That’s why the
compony may make lower units than budgeted unit sales.

c.
Pearl Products Limited
Direct Material Budget
 July August September October Total Quarter
Required Production
in units of FG $ 36,000.00 $ 42,000.00 $ 46,000.00 $ 28,000.00 $ 124,000.00
Units of DM needed
per unit of FG $ 3.00 $ 3.00 $ 3.00 $ 3.00 $ 3.00

Units of DM needed for

required production
Add: Desired Ending
Inventory
Total units of DM used
Less Beginning Inventory
Units of DM to be purchased
$ 108,000.00 $ 126,000.00 $ 138,000.00 $ 84,000.00 $ 372,000.00
$ 63,000.00 $ 69,000.00 $ 42,000.00 $ 42,000.00
$ 171,000.00 $ 195,000.00 $ 180,000.00 $ 414,000.00
$ (54,000.00) $ (63,000.00) $ (69,000.00) $ (54,000.00)
$ 117,000.00 $ 132,000.00 $ 111,000.00 $ 360,000.00

Problem 9-18
Page 403
1.
Zan Corporation
 Direct Material Budget

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total

Production Need
Add Ending Inventory
Total needs
Less Beginning Inventory
Direct Material to be purchased
Cost per gram
Cost of DM to be purchased
$ 40,000.00 $ 64,000.00 $ 56,000.00 $ 48,000.00 $ 208,000.00
$ 16,000.00 $ 14,000.00 $ 12,000.00 $ 8,000.00 $ 50,000.00
$ 56,000.00 $ 78,000.00 $ 68,000.00 $ 56,000.00 $ 258,000.00
$ (6,000.00) $ (16,000.00) $ (14,000.00) $ (12,000.00) $ (48,000.00)
$ 50,000.00 $ 62,000.00 $ 54,000.00 $ 44,000.00 $ 210,000.00
$ 1.20 $ 1.20 $ 1.20 $ 1.20 $ 1.20
$ 60,000.00 $ 74,400.00 $ 64,800.00 $ 52,800.00 $ 252,000.00

Zan Corporation
Schedule of Cash Disbursement Budget

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total

Payment of puchased material (60 $ 36,000.00 $ 44,640.00 $ 38,880.00 $ 31,680.00 $ 151,200.00
Remaining (40%) $ 2,880.00 $ 24,000.00 $ 29,760.00 $ 25,920.00 $ 82,560.00
Total Cash dusbursement $ 38,880.00 $ 68,640.00 $ 68,640.00 $ 57,600.00 $ 233,760.00

2.
Zan Corporation
Direct Labor Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total
Direct Labor Required $ 1,000.00 $ 1,600.00 $ 1,400.00 $ 1,200.00 $ 5,200.00
Direct Labor per hour cost $ 11.50 $ 11.50 $ 11.50 $ 11.50 $ 11.50
Cost of Labor $ 11,500.00 $ 18,400.00 $ 16,100.00 $ 13,800.00 $ 59,800.00

Problem 9-19
Page 403-4

Minden Company
 Cash Budget

1.

Schedule of cash collection

Cash sales -May $60,000.00
Collections of account receivable
Account Receivable $54,000.00
May sales $70,000.00
Total Cash Receipts $184,000.00

Schedule of cash Disbursement

April 30 Acount Payable Balance $63,000.00
May purchases $48,000.00
Total Cash Payments $111,000.00

Schedule Of Cash Budget

Beginning Cash Balance $9,000.00
Cash Reciept $184,000.00
Total $193,000.00
Payments
Cash Payments -$111,000.00
Selling and Admin expense -$72,000.00
Equipment Purchase -$6,500.00
Note payable paid -$14,600.00
Total Payments -$204,100.00
Profit/Loss -$11,100.00
Financing
Borrowing $20,000.00
Repayment
Intrest
Total Financing $20,000.00
Cash Ending Balance $8,900.00

2.
Minden Company
Absorption Costing Income Statement
 For the Year Ended

Sales revenue $ 200,000.00

Less cost of goods sold
Cost of goods manufactured $ -
Add Beginning finished goods inventory $ 30,000.00
Add Purchases $ 120,000.00
Cost of goods available for sale $ 150,000.00
Less Ending finished goods inventory $ (40,000.00)
less COGS $ (110,000.00)
Gross Margin $ 90,000.00
Selling and Adminstrative Expense $ (72,000.00)
Depreciation $ (2,000.00)
Interest Expense $ (100.00)
Total Expenses $ (74,100.00)
Net income $ 15,900.00

3.
Minden Company
Budgeted Balance Sheet
For the Year Ended

Assets:
Cash $ 8,900.00
Account Receivable $ 70,000.00
Inventory $ 40,000.00
Building and equipment $ 215,500.00
Total Assets $ 334,400.00

Liabilities and Capital Stock

Account Payable $ 72,000.00
Note Payable $ 20,000.00
Capital Stock $ 180,000.00
Retained Earning $ 58,400.00
Total Liabilities and Common equity $ 330,400.00

Problem 9-23
Page 406
1.
Herbal Care Corp.
Schedule Cash Collection Budget

Particulars July August September

Cash Sales (present month) $ 100,000.00 $ 150,000.00 $ 80,000.00
Collections of sales after 1st month $ 210,000.00 $ 280,000.00 $ 420,000.00
Collections of sales after 2nd month $ 7,500.00 $ 9,000.00 $ 12,000.00
Total Sales $ 317,500.00 $ 439,000.00 $ 512,000.00

Cash Collections for quarter

Cash Collections for july $ 317,500.00
Cash Collections for August $ 439,000.00
Cash Collections for September $ 512,000.00
Total $ 1,268,500.00

2.
Herbal Care Corp.
 Schedule Cash Budget

Schedule Of Cash Budget July August September Quarter Total

Beginning Cash Balance $ 44,500.00 $ 28,000.00 $ 23,000.00 $ 44,500.00
Add Cash Collections $ 317,500.00 $ 439,000.00 $ 512,000.00 $ 1,268,500.00
Total Cash Available $ 362,000.00 $ 467,000.00 $ 535,000.00 $ 1,313,000.00
Less Cash Disbursement
Payment for merchandise $ 180,000.00 $ 240,000.00 $ 350,000.00 $ 770,000.00
Salaries and Wages $ 45,000.00 $ 50,000.00 $ 40,000.00 $ 135,000.00
Advertising $ 130,000.00 $ 145,000.00 $ 80,000.00 $ 355,000.00
Rent Payments $ 9,000.00 $ 9,000.00 $ 9,000.00 $ 27,000.00
Equipments Purchase $ 10,000.00 $ 10,000.00
Total Cash Disbursement $ 374,000.00 $ 444,000.00 $ 479,000.00 $ 1,297,000.00
Excess/Deficency of cash $ (12,000.00) $ 23,000.00 $ 56,000.00 $ 16,000.00
Financing
Borrowigs $ 40,000.00 $ 40,000.00
Repayments $ (40,000.00) $ (40,000.00)
Interest $ (1,200.00) $ (1,200.00)
Total Financing $ 40,000.00 $ - $ (41,200.00) $ (1,200.00)

3.
If company Borrow Loan from the Bank $20,000 for every month the cash balance of each month and
quarter would be:

Schedule Of Cash Budget July August September Quarter Total

Beginning Cash Balance $ 44,500.00 $ 48,000.00 $ 43,000.00 $ 44,500.00
Add Cash Collections $ 317,500.00 $ 439,000.00 $ 512,000.00 $ 1,268,500.00
Total Cash Available $ 362,000.00 $ 487,000.00 $ 555,000.00 $ 1,313,000.00
Less Cash Disbursement
Payment for merchandise $ 180,000.00 $ 240,000.00 $ 350,000.00 $ 770,000.00
Salaries and Wages $ 45,000.00 $ 50,000.00 $ 40,000.00 $ 135,000.00
Advertising $ 130,000.00 $ 145,000.00 $ 80,000.00 $ 355,000.00
Rent Payments $ 9,000.00 $ 9,000.00 $ 9,000.00 $ 27,000.00
Equipments Purchase $ 10,000.00 $ 10,000.00
Total Cash Disbursement $ 374,000.00 $ 444,000.00 $ 479,000.00 $ 1,297,000.00
Excess/Deficency of cash $ (12,000.00) $ 43,000.00 $ 76,000.00 $ 16,000.00
Financing
Borrowigs $ 60,000.00 $ 20,000.00 $ (20,000.00) $ 60,000.00
Repayments $ (60,000.00) $ (60,000.00)
Interest $ (1,200.00) $ (1,200.00)
Total Financing $ 60,000.00 $ - $ (81,200.00) $ (1,200.00)

From the above, we can say that it not only would repay it but we will be better for first two months in 3 rd
it will put us on loss but overall, the total would be same. if we borrow.
Problem 9-24
Page 407

1.
Garden Sales Inc.
Schedule Cash Collection Budget

Particulars April May June Quarter

Cash Sales $ 120,000.00 $ 180,000.00 $ 100,000.00 $ 400,000.00
Sales on Account $ -
February Sales $ 32,000.00 $ 32,000.00
March Sales $ 168,000.00 $ 48,000.00 $ 216,000.00
April Sales $ 48,000.00 $ 336,000.00 $ 96,000.00 $ 480,000.00
May Sales $ 72,000.00 $ 504,000.00 $ 576,000.00
June Sales $ 40,000.00 $ 40,000.00
Total Cah Collections $ 368,000.00 $ 636,000.00 $ 740,000.00 $ 1,744,000.00

2. A)
 Garden Sales Inc.
Schedule Cash Collection Budget
Particulars April May June Quarter
Cost of Goods Sold $ 420,000.00 $ 630,000.00 $ 350,000.00 $ 1,400,000.00
Desired Ending Inventory $ 126,000.00 $ 70,000.00 $ 56,000.00 $ 252,000.00
Total Needs $ 546,000.00 $ 700,000.00 $ 406,000.00 $ 1,652,000.00
Less Begining Inventory $ (84,000.00) $ (126,000.00) $ (70,000.00) $ (280,000.00)
Inventory purchases $ 48,000.00 $ 336,000.00 $ 96,000.00 $ 1,372,000.00

B)
Garden Sales Inc.
Schedule Cash Disbursement Budget
Particulars April May June Quarter
Account Payable $ 126,000.00 $ 126,000.00
April Purchases $ 231,000.00 $ 231,000.00 $ 462,000.00
May Purchases $ 287,000.00 $ 287,000.00 $ 574,000.00
June Purchases $ 168,000.00 $ 168,000.00
Total cash disbursements $ 357,000.00 $ 518,000.00 $ 455,000.00 $ 1,330,000.00

3.
Garden Sales Inc.
 Schedule of Cash Budget

Schedule Of Cash Budget April May June Quarter Total

Beginning Cash Balance $ 52,000.00 $ 40,000.00 $ 40,000.00 $ 52,000.00
Add Cash Collections $ 368,000.00 $ 636,000.00 $ 740,000.00 $ 1,744,000.00
Total Cash Available $ 420,000.00 $ 676,000.00 $ 780,000.00 $ 1,796,000.00
Less Cash Disbursement
Payment for merchandise $ 357,000.00 $ 518,000.00 $ 455,000.00 $ 1,330,000.00
Selling Expense $ 79,000.00 $ 120,000.00 $ 62,000.00 $ 261,000.00
Administrative Expense $ 25,000.00 $ 32,000.00 $ 21,000.00 $ 78,000.00
Land Purchases $ - $ 16,000.00 $ - $ 16,000.00
Dividend paid $ 49,000.00 $ 49,000.00
Total Cash Disbursement $ 510,000.00 $ 686,000.00 $ 538,000.00 $ 1,734,000.00
Excess/Deficency of cash $ (90,000.00) $ (10,000.00) $ 242,000.00 $ 62,000.00
Financing
Borrowigs $ 130,000.00 $ 50,000.00 $ 180,000.00
Repayments $ (180,000.00) $ (180,000.00)
Interest $ (4,900.00) $ (4,900.00)
Total Financing $ 130,000.00 $ 50,000.00 $ (184,900.00) $ (4,900.00)

Problem 9-25
Page 407
1.
Shillow Company
Schedule of Expected Cash Collections

April May June Quarter

`Cash Sales $ 36,000.00 $ 43,200.00 $ 54,000.00 $ 133,200.00
Credit Sales $ 20,000.00 $ 24,000.00 $ 28,800.00 $ 72,800.00
Total Collections $ 56,000.00 $ 67,200.00 $ 82,800.00 $ 206,000.00

2.
 Shillow Company
Schedule of Purchase Budget

April May June Quarter

Budgeted cost of goods sold $ 45,000.00 $ 54,000.00 $ 67,500.00 $ 166,500.00
Add Desired Ending inventory $ 43,200.00 $ 54,000.00 $ 28,800.00 $ 28,800.00
Total Need $ 88,200.00 $ 108,000.00 $ 96,300.00 $ 195,300.00
Less: Beginning inventory $ (36,000.00) $ (43,200.00) $ (54,000.00) $ (36,000.00)
Reuired Purchases $ 52,200.00 $ 64,800.00 $ 42,300.00 $ 159,300.00

3.
Shillow Company
Schedule of Cash Disbursements

April May June Quarter

March Purchases $ 21,750.00 $ 21,750.00
Add April Purchases $ 26,100.00 $ 26,100.00 $ 52,200.00
Add May Purchases $ 47,850.00 $ 32,400.00 $ 32,400.00 $ 64,800.00
Add June Purchases $ - $ 21,150.00 $ 21,150.00
Total Disvursements $ 47,850.00 $ 32,400.00 $ 53,550.00 $ 159,900.00

4.
 Shillow Company
Schedule of Cash Disbursements for Operating Expenses

April May June Quarter

Commisions $ 7,200.00 $ 8,640.00 $ 10,800.00 $ 26,640.00
Add Rent $ 2,500.00 $ 2,500.00 $ 2,500.00 $ 7,500.00
Add Other expenses $ 3,600.00 $ 4,320.00 $ 5,400.00 $ 13,320.00
Total Disbursements $ 13,300.00 $ 15,460.00 $ 18,700.00 $ 47,460.00

5.
Shillow Company
Schedule of Cash Budget

Schedule Of Cash Budget April May June Quarter Total

Beginning Cash Balance $ 8,000.00 $ 4,350.00 $ 4,590.00 $ 8,000.00
Add Cash Collections $ 56,000.00 $ 67,200.00 $ 82,800.00 $ 206,000.00
Total Cash Available $ 64,000.00 $ 71,550.00 $ 87,390.00 $ 214,000.00
Less Cash Disbursement
For inventory $ 47,850.00 $ 58,500.00 $ 53,550.00 $ 159,900.00
For expenses $ 13,300.00 $ 15,460.00 $ 18,700.00 $ 47,460.00
For equipment $ 1,500.00 $ - $ - $ 1,500.00
Total Cash Disbursement $ 62,650.00 $ 73,960.00 $ 72,250.00 $ 208,860.00
Excess/Deficency of cash $ 1,350.00 $ (2,410.00) $ 15,140.00 $ 5,140.00
Financing
Borrowigs $ 3,000.00 $ 7,000.00 $ 10,000.00
Repayments $ - $ (10,000.00) $ (10,000.00)
Interest $ - $ (230.00) $ (230.00)
Total Financing $ 3,000.00 $ 7,000.00 $ (10,230.00) $ (230.00)
Cash Balance $ 4,350.00 $ 4,590.00 $ 4,910.00 $ 4,910.00

6.
 Shillow Company
Income Statement

Sales revenue $ 222,000.00

Less cost of goods sold
Cost of goods manufactured $ 36,000.00
Add Beginning finished goods inventory $ 159,300.00
Cost of goods available for sale $ 195,300.00
Less Ending finished goods inventory $ (28,800.00)
less COGS $ (166,500.00)
Gross profit $ 55,500.00
Less Operating expense
Commisions $ 26,640.00
Rent $ 7,500.00
Depreciation $ 2,700.00
Other Expenses $ 13,320.00
Total O.E $ (50,160.00)
Net Operating Income $ 5,340.00

7.
Shillow Company
Balance Sheet

Assets:
Cash $ 4,910.00
Account Receivable $ 36,000.00
Inventory $ 28,800.00
Building and equipment $ 118,800.00
Total Assets $ 188,510.00

Liabilities and Capital Stock

Account Payable $ 21,150.00
Capital Stock $ 150,000.00
Retained Earning $ 17,360.00
Total Liabilities and Common equity $ 188,510.00

Problem 9-28
 Page 411

1.
Hillyard Company
Schedule of Expected Cash Collections

January Feb March Quarter

`Cash Sales $ 80,000.00 $ 120,000.00 $ 60,000.00 $ 260,000.00
Credit Sales $ 224,000.00 $ 320,000.00 $ 480,000.00 $ 1,024,000.00
Total Collections $ 304,000.00 $ 440,000.00 $ 540,000.00 $ 1,284,000.00

2.
Hillyard Company
Schedule of Purchase Budget

Jan Feb March Quarter

Budgeted cost of goods sold $ 240,000.00 $ 360,000.00 $ 180,000.00 $ 780,000.00
Add Desired Ending inventory $ 90,000.00 $ 45,000.00 $ 30,000.00 $ 30,000.00
Total Need $ 330,000.00 $ 405,000.00 $ 210,000.00 $ 810,000.00
Less: Beginning inventory $ (60,000.00) $ (90,000.00) $ (45,000.00) $ (60,000.00)
Reuired Purchases $ 270,000.00 $ 315,000.00 $ 165,000.00 $ 750,000.00

3.
 Hillyard Company
Schedule of Cash Disbursements

Jan Feb March Quarter

December Purchases $ 93,000.00 $ 93,000.00
Add Jan Purchases $ 135,000.00 $ 135,000.00 $ 270,000.00
Add Feb Purchases $ 228,000.00 $ 135,000.00 $ 157,500.00 $ 315,000.00
Add March Purchases $ - $ 15,750.00 $ 82,500.00 $ 82,500.00
Total Disbursements $ 228,000.00 $ 150,750.00 $ 240,000.00 $ 760,500.00

4.
Hillyard Company
Schedule of Cash Disbursements for Operating Expenses

Jan Feb March Quarter

Salaries and Wages $ 27,000.00 $ 27,000.00 $ 27,000.00 $ 81,000.00
Commisions $ 70,000.00 $ 70,000.00 $ 70,000.00 $ 210,000.00
Add Rent $ 20,000.00 $ 30,000.00 $ 15,000.00 $ 65,000.00
Add Other expenses $ 12,000.00 $ 18,000.00 $ 9,000.00 $ 39,000.00
Total Disbursements $ 129,000.00 $ 145,000.00 $ 121,000.00 $ 395,000.00

5.
 Hillyard Company
Schedule of Cash Budget

Schedule Of Cash Budget Jan Feb March Quarter Total

Beginning Cash Balance $ 48,000.00 $ 30,000.00 $ 30,800.00 $ 48,000.00
Add Cash Collections $ 304,000.00 $ 440,000.00 $ 540,000.00 $ 1,284,000.00
Total Cash Available $ 352,000.00 $ 470,000.00 $ 570,800.00 $ 1,332,000.00
Less Cash Disbursement
For inventory $ 228,000.00 $ 292,500.00 $ 240,000.00 $ 760,500.00
For expenses $ 129,000.00 $ 145,000.00 $ 121,000.00 $ 395,000.00
For equipment $ - $ 1,700.00 $ 84,500.00 $ 86,200.00
Cash Dividends $ 45,000.00 $ - $ 45,000.00
Total Cash Disbursement $ 402,000.00 $ 439,200.00 $ 445,500.00 $ 1,286,700.00
Excess/Deficency of cash $ (50,000.00) $ 30,800.00 $ 125,300.00 $ 45,300.00
Financing
Borrowigs $ 80,000.00 $ -
$ - $ 80,000.00
Repayments $ - $ (80,000.00) $ (80,000.00)
Interest $ - $ (2,400.00) $ (2,400.00)
Total Financing $ 80,000.00 $ - $ (82,400.00) $ (2,400.00)
Cash Balance $ 30,000.00 $ 30,800.00 $ 42,900.00 $ 42,900.00

6.
Hillyard Company
Income Statement

Sales revenue $ 1,300,000.00

Less cost of goods sold
Cost of goods manufactured $ 60,000.00
Add Beginning finished goods inventory $ 750,000.00
Cost of goods available for sale $ 810,000.00
Less Ending finished goods inventory $ (30,000.00)
less COGS $ (780,000.00)
Gross profit $ 520,000.00
Less Operating expense
Commisions $ 81,000.00
Rent $ 210,000.00
Shipping $ 65,000.00
Depreciation $ 42,000.00
Other Expenses $ 39,000.00
Total O.E $ (437,000.00)

7.
 Hillyard Company
Balance Sheet

Assets:
Cash $ 42,900.00
Account Receivable $ 240,000.00
Inventory $ 30,000.00
Building and equipment $ 414,200.00
Total Assets $ 727,100.00

Liabilities and Capital Stock

Account Payable $ 82,500.00
Capital Stock $ 500,000.00
Retained Earning $ 144,600.00
Total Liabilities and Common equity $ 727,100.00