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Managerial Accounting Chapter 7

The document contains budgets for cost of goods sold, merchandise purchases, sales, cash collections, purchases, and cash for June, July and August. It shows the calculations for budgeted cost of goods sold, merchandise needed, purchases needed, and cash receipts and disbursements on a monthly basis to develop an overall cash budget for the months of June, July and August.

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Neema Mark
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122 views4 pages

Managerial Accounting Chapter 7

The document contains budgets for cost of goods sold, merchandise purchases, sales, cash collections, purchases, and cash for June, July and August. It shows the calculations for budgeted cost of goods sold, merchandise needed, purchases needed, and cash receipts and disbursements on a monthly basis to develop an overall cash budget for the months of June, July and August.

Uploaded by

Neema Mark
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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7-28

1. Budgeted Cost of Goods Sold for June = $ 1,980,000 / 120 x 100 = $ 1,650,000.

2. Budgeted Merchandise Purchase for July:

June July August

Budgeted Cost of Goods Sold $ 1,650,000 $ 1,730,000 $ 1,820,000

Desired Ending Inventory 432,500 455,000

Total Inventory Needed 2,185,000

Less: Beginning Inventory (25% of COGS) 412,500 432,500 455,000

Budgeted Merchandise Purchases $ 1,752,500

7-30 

Sales Budget 

June  July  August 


$ $ $
Cash sales  349,600 352,800 401,600
Credit sales  87,400 88200 100,400
Total Sales  437,000 441,000 502,000

Cash Collection Budget 


June  July  August 
$ $ $
Cash sales (80% of current month sales) 349,600 352,800 401,600
Credit sales (20% of following month 88,200 100,400 106,200

sales)
Total Collections  437,800 453,200 507,800

7-31

Sales Budget 

January  February March


$ $ $
Cash sales  81,200 90,800 99,200
Credit 121,800 136,200 148,800

Sales 
Total Sales  203,000 227,000 248,000

Cash Collections Budget 

Januar February March 

y
$ $ $
Cash Sales  811,200 90,800 99,200
Credit sales: 
55% collected in the month of the 66,990 74,910 81,840
sale
35% in the following month  52,850 42,630 47,670
10% in the following month  15,000 15,100 12,180
Total Collections  216,040 223,440 240,890

7-33

Purchases Budget 
June  July  August 
$ $ $
Budgeted cost of goods sold  291,85 233,35 198,900

0 0
Plus, desired ending 226,00 209,00 241,000
inventory 
0 0
Total merchandise needed  517,85 442,35 439,900

0 0
Less beginning inventory  271,00 226,00 209,000

0 0
Purchases  788,85 668,35 648,900

0 0

Cash Disbursement for Purchases 

June  July  August 

$ $ $
15% of that month purchases  118,327. 100,252. 97,335

5 5
70% of next month purchases  131,600 552,195 467,845
15% of following month 38,700 28,200 118,327.5
purchases
Disbursement for purchases  288,627. 680,647. 683,507.5

5 5

7-35

Cash Budget

June
$
Beginning cash balance  15,000
Cash receipts and disbursements:
Collection from customers  276,000
Payment for merchandise  (193,000)
Payment for operating expenses (56,000)
Net Cash receipts and disbursements  27,000
Ending cash balance  42,000

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