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    Master Budget Exercises

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    Snowy White
    What is an audit trail? An audit trail is a detailed, chronological record whereby accounting records, project details, transactions, user activity, or other financial data are tracked and traced.

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    Master Budget Exercises

    Uploaded by

    Snowy White
    15 views1 page
    What is an audit trail? An audit trail is a detailed, chronological record whereby accounting records, project details, transactions, user activity, or other financial data are tracked and traced.

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    MASTER-BUDGET-EXERCISES

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    What is an audit trail? An audit trail is a detailed, chronological record whereby accounting records, project details, transactions, user activity, or other financial data are tracked and traced.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views1 page

    Master Budget Exercises

    Uploaded by

    Snowy White
    What is an audit trail? An audit trail is a detailed, chronological record whereby accounting records, project details, transactions, user activity, or other financial data are tracked and traced.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    MASTER BUDGET EXERCISES

    1. A company budgeted its activity for October 2024 from the following information:
     Sales are budgeted at P750,000. All sales are credit sales and a provision for doubtful accounts is made monthly at the
    rate of 2% of sales.
     Merchandise inventory was P120,000 at September 30, 2024, and an increase of P10,000 is planned for the month.
     All merchandise is marked up to sell at invoice cost plus 50%.
     Estimated cash disbursements for selling and administrative expenses for the month are P105,000.
     Depreciation for the month is projected at P25,000.
    Required: Projected operating income for October 2024.

    2. A company has the following information:


    Month/s Budgeted Sales
    March P 50,000
    April 53,000
    May 51,000
    June 54,500
    July 52,500
    In addition, the gross profit rate is 40% and the desired inventory level is 30% of next month’s cost of sales.
    Required: Purchases budget for April through June.

    3. A company reports the year-end information from 2023 as follows:


    Sales P 250,000
    Less: Cost of goods sold 150,000
    Gross profit 100,000
    Operating expenses (includes P10,000 of depreciation) 60,000
    Net income P 40,000
    ========

    The company is developing its 2024 budget. In 2024, it would like to increase selling prices by 10%, and as a result
    expects a decrease in sales volume of 5%. Cost of goods sold as a percentage of sales is expected to increase to 62%.
    Other than depreciation, all operating costs are variable.
    Required: Budgeted income statement for 2024.

    4. Information pertaining to a corporation’s sales revenue is presented in the following table:


    February March April
    Cash sales P160,000 P150,000 P120,000
    Credit sales 300,000 400,000 280,000
    Total sales P460,000 P550,000 P400,000
    ======= ======= =======
    Management estimates that 5% of credit sales are not collectible. Of the credit sales that are collectible, 60% are collected
    in the month of sale and the remainder in the month following the sale. Cost of purchases of inventory each month is 70%
    of the next month’s projected total sales. All purchases of inventory are on account: 25% are paid in the month of
    purchases, and the remainder is paid in the month following the purchase.
    Required:
    a. Budgeted total cash receipts in April.
    b. Budgeted total cash payments in March for inventory purchases.

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