WEEK 6 Chapter 9 Managerial Accounting for Managers PROBLEM 9-17


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This is for Mr. Shrugal 9 pages WEEK 6 Chapter 9 Managerial Accounting for Managers.docx WEEK 6 Chapter 9 Managerial Accounting for Managers PROBLEM 9-17 JANUS PRODUCTS, INC. PAGE 404 Janus Products, Inc. is a merchandising company that sells binders, papers and other school supplies, borrowed money during the 3rd quarter to support peak, sales of back –to-school materials which occur during August. The following information are assembled to assist in preparing a cash budget for the quarter. a. Budgeted monthly absorption costing income statements for July-Oct. are as follows: July August September October Sales……………………………………………………………….……… $40,000 $70,000 $50,000 $45,000 Cost of goods sold………………………………………………….. 24,000 42,000 30,000 27,000 Gross Margin………………………………………………………….. 16,000 28,000 20,000 18,000 Selling and Administrative expenses: Selling expense……………………………………………………. 7,200 11,700 8,500 7,300 Administrative expense*………………………………………. 5,600 7,200 6,100 5,900 Total Selling and administrative expenses……………… 12,800 18,900 14,600 13,200 Net operating Income…………………………………………….$ 3,200 $ 9,100 $ 5,400 $ 4,800 Includes $2,000 Depreciation each month b. Sales are 20% for cash and 80% for credit. c. Credit sales are collected over a three month period with 10% collected in the month of sale, 70% in the month following sale, and 20% in the second month following sales. May sales Totaled $30,000, and June sales totaled $36,000. d. Inventory purchases are paid for within 15 days. Therefore, 50%of a month’s inventory purchases are for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable for inventory purchases at June 30 total $11,700. e. The company maintains its ending inventory levels at 75% of the cost of the merchandise to be sold in the following month. The merchandise inventory at June 30 is $18,000. f. Land costing $4,500 will be purchased in July. g. Dividends of $1,000 will be declared and paid in September. h. The cash balance on June30 is $8,000; the company must maintain a cash balance of at least this amount at the end of each month. i. The company has an agreement with a local bank that allows it to borrow in increments of $1,000 at the beginning of each month, up total loan balance of $40,000. The interest of rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. The company would, as for as it is able, repay the loan plus accumulated interest at the end of the quarter. REQUIRED: 1. Prepare a schedule of expected cash collection for July, August, and September and for the quarter in total. 2. Prepare the following for merchandise inventory: a. A merchandise purchases budget for July, August and September. b. A schedule of expected cash disbursements for merchandise purchases for July, August and September and for the quarter in total. 3, Prepare a cash budget for July, August, and September and for the quarter in total. PROBLEM 9-19 Cyrdon, Inc. Integration of Sales, Production, and Direct Materials Budgets (LO 9-2, LO 9-3, LO 9-4). Cyrdon, Inc. manufacturers an advanced swim fin for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following information to assist in preparing the budget: a. The Marketing Department has estimated sales as follows for the remainder of the year (in pairs of swim fins): The selling price of swim fins is $50 per pair. July………………………. 6,000 August…………………. 7,000 September………….. 8,000 October……………………..4,000 November………………….3,000 December………………….3,000 b. All sales are on account. Based on past experience, sales are expected to be collected in the following pattern: 40% in the month of sale 50% in the month following sale 10% uncollectible The beginning accounts receivable balance (excluding uncollectible amounts) on July 1 will be $130,000. c. The company maintains finished goods inventories e

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