The Ending Finished Goods Inventory

Budget
• The ending finished goods inventory budget calculates the cost
of the finished goods inventory (complete and ready for sale but
have not been sold) at the end of each budget period.
• It also includes the unit quantity of finished goods at the end of
each budget period.
• The primary purpose of this budget is to provide the amount of
the inventory asset that appears in the budgeted balance sheet,
which is then used to determine the amount of cash needed to
invest in assets. If you do not intend to create a budgeted
balance sheet, there is no need to create an ending finished
goods inventory budget.
The selling and administrative expenses budget
of a company is a line-item document showing all expenses incurred by
a company that are not directly related to the manufacture of the
company's products. These items might be salaries of office staff, new
computers for a department, and/or commission rates on sales.
 Selling and Administrative Budget :
The budgeted unit sales of Weller Company for the upcoming fiscal year are provided below:
Budgeted Unit Sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
$15,000 $16,000 $14,000 $13,000
The company's variable selling and administrative expense per unit is $2.50. Fixed selling
and administrative expenses include advertising expense of $8,000 per. quarter, executive
salaries of $35,000 per quarter, and depreciation of $20,000 per quarter. In addition, the
company will make insurance payments of $5,000 in the first quarter and $5,000 in the third
quarter. Finally, property taxes of $8,000 will be paid in the second quarter.
REQUIRED:
• Prepare the company's selling and administrative expense budget for the upcoming fiscal
year.
The cash Budget
• Cash Budgeting
Cash budgeting is a statement which records cash inflows and cash
outflows likely to take place in definite future period of time
OR
Is an estimate of cash receptance and disbursement over various interval
of time
Objectives:
• To estimate the firm cash receipts during the budget period
• To estimate the financial requirements
• To estimate the surplus or deficit of cash
• To make proper utilization of cash
Importance of cash budgeting
• To control over the cash expenses
• Operation with minimum cash
• Helpful in cash planning
• Knowledge of factors effecting cash position
Method
Cash Receipt method
Two main heads
1. Cash receipt
2. Cash payment
Cash receipt
Cash receipt from business operations
( sales , collections from dept)
• Non- Business operations
Like : ( dividends, commission, taxes, runds etc)
• Credit receipts from capital transactions
1.Issue of shares
2. Sale of fixed assets
3. Investments
• Cash payments
1. Payment to the worker
2. Overhead (expenses)
3. Redemption of debenture
Cash Budget
Garden Depot is a retailer that is preparing its budget for the upcoming first
year. Management has prepared for following summary of its budgeted cash
flows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
• Total Cash Receipts $180,000 $330,000 $210,000 $230,000
• Total Cash Disbursement $260,000 $230,000 $220,000 $240,000
The company’s beginning cash balance for the upcoming fiscal year will be $20,000. the
company requires a minimum cash balance of $10,000 and may barrow any amount needed
from a local bank at a quarterly interest rate 3%. The company may barrow any amount at the
beginning of any quarter and may repay its loan, at the end of any quarter. Interest payments
are due on any principal at the time it is paid. For simplicity, assumed that interest is cot
compounded.

• REQUIRED: Prepare the company’s Cash budget for the upcoming fiscal
year
Budgeted Income Statement
• Gig Harbor Boating is the wholesale Distributor of a small recreational Catamaran sailboart.
Management has prepared the following summary to use in its annual budgeting process:
• Budgeted Units Sales ------------------------------------------------------------------------------- 460
• Selling Price Per Unit-------------------------------------------------------------------------------$1,950
• Cost Per Unit-----------------------------------------------------------------------------------------$1,575
• Variable Selling & Administrative Expense( Per Unit)-------------------------------------------$75
• Fixed Selling & Administrative Expense (Per Year)-------------------------------------------$105,000
• Interest Expense For The Year ---------------------------------------------------------------------$14,000

• REQUIRED Prepare the Company’s budgeted Income statement. Use the

Absorption Costing Income Statement Format
 Budgeted Balance Sheet
• The Management of MECCA copy, a photocopying center located on University Avenue, has compiled the
following data to use in preparing its budgeted balance sheet for next year:

. ENDING
BALANCE
• Cash ------------------------------------------------------------------- ?
• Account Payable----------------------------------------------------- $8,100
• Suppliers Inventory ------------------------------------------------- $3,200
• Equipment ------------------------------------------------------------ $34,000
• Accumulated Depreciation---------------------------------------- $16,000
• Account Payable ----------------------------------------------------- $1,800
• Common Stock-------------------------------------------------------- $5,000
• Retained Earnings---------------------------------------------------- ?

The beginning balance of Retained Earnings was $28,000 net income is budgeted to be $11,500 and dividends
are budgeted to be $4,800

REQUIRED Prepare the Company’s budgeted balance sheet

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