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Accounting (51)
ACCTG322 (11)
Chapter 9

Chapter 9.pdf

6 Pages
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Department
Accounting
Course Code
ACCTG322
Professor
Trish Stringer

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Chapter 9 – Solutions to Recommended Questions Problem 9-12 1. September cash sales..............................................................$ 7,400....... September collections on account: July sales: $20,000 × 18% .......................................................3,600.... August sales: $30,000 × 70%.....................................................21,000. September sales: $40,000 × 10%...................................................4,000 Total cash collections...........................................................$36,000.......... 2. Payments to suppliers: August purchases (accounts payable)............................................$16,000 September purchases: $25,000 × 20%.............................................. 5,000 Total cash payments..............................................................$21,000......... Products 3. Calgon Cash Budget For the Month of September Cash balance, September 1............................................................. $ 9,000 Add cash receipts: Collections from customers ........................................................ 36,000 Total cash available before current financing................................. 45,000 Ledsisbursements: Payments to suppliers for inventory ....................................$21,000 Selling and administrative expenses.......................................9,000 * Equipmep ntrchas...s..............................................18,000........... Dividends paid............................................................3,000........... Total disbursements........................................................................51,000 Excess (deficiency) of cash available over disbursements............. (6,000) Financing: Borrowin.g .....................................................................11,000..... Repaymen ...........................................................................0.... Interest......................................................................................0.. Total financing............................................................................11,000 Cash balance, September 30........................................................... $ 5,000 *$13,000 – $4,000 = $9,000. Page 1 of 6 Chapter 9 – Solutions to Recommended Questions Problem 9-14 1. Producbtonget: July August September October Budgeted sales (units)......................60,000 75,000 105,000 53,000 Add desired ending inventory ............. 23,000 29,000 18,600 14,000 Totale.............................83,000.....104,000 123,600 67,000 Less beginning inventory....................22,000 23,000 29,000 18,600 Requirperoducti....................61,000.. 81,000 94,600 48,400 Note: July E.I. = 8,000 units + 75,000 (next months sales) x 20% October E.I. = 8,000 units + 30,000 (Nov. Sales) x 20% 2. During July andAugust the company is building inventories in anticipation of peak sales in September. Therefore, production exceeds sales during these months. In September and Oc- tober inventories are being reduced in anticipation of a decrease in sales during the last months of the year. Therefore, production is le ss than sales during these months to cut back on inventory levels. 3. Direct materials budget: Third Quar- July AugusS t eptember ter Required production (units)............... 61,000 81,000 94,600 236,600 Material D236 needed per unit.......... x 4 kgs. x 4 kgs. x 4 kgs. x 4 kgs. Production needs (kgs.) ...................244,000 324,000 378,400 946,400 Add desired ending inventory (kgs.) . 129,600 151,360 77,477,440 Total Material D236 needs................. 373,600 475,360 455840 1,023,840 Less beginning inventory (kgs.)......... 129,000 129,600 151,360 129,000 Material D236 purchases (kgs.)......... 244,600 345,760 304,480 894,840 * 48,400 units (October production) × 4 kgs. per unit = 193,600 kgs.; 193,600 kgs. × 0.4 = 77,440 kgs. As shown in part (1), production is greatest in September. However, as shown in the raw ma- terial purchases budget, the purchases of materials is greatest a month earlier because materi- als must be on hand to support the heavy production scheduled for September. Page 2 of 6 Page 3 of 6 0.30 $10.50 $1.50 $129,150 92,000 28,00$082,450 0.30 $1.50 4th $10.$40,950 4th 23,000 7,000$21,850 Quarter Year Quarter Year $1.50 3rd 0.30 $10.$28,350 3rd 23,000 7,000$20,050 Quarter Quarter $1.50 2nd 0.30 $10.$34,650 2nd 23,000 7,000$20,950 Quarter Quarter 1st 1st Direct LaQuarterdget Quarter Culbert Dessert Corporation Culbert Dessert Corporation Manufacturing Overhead Budget ........r...... 2,400 3,300 2,700 3,90012,300 overhead .....................................................
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