[The following information applies to..the que.stions displayed below.

]""

Midwest Products is a wholesale distributor of leaf rakes. Thus, peak sales occur in August of each year
as shown in the company's sales budget for the third quarter, given below:

July August September Total

Budgeted sales (all on account) $600,000 $ 900,000 $500,000 $2,000,000

From past experience, the company has learned that 20% of a month's sales are collected in the month
of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in
the second month following sale. Bad debts are negligible and can be ignored. May sales totaled
$430,000 , and June sales totaled $540,000.

1. value:
10.00 points
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the third
quarter. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0"
wherever required. Omit the "$" sign in your response.)

Schedule of Expected Cash Collections

July August September Total
May sales $ :=1= =43=oo=:
ol $1 ol $I ol $1 43ooo I
l=====l
June sales 378000 54000 I oI 432000
July sales 120000 420000 . 60000 600000
August sales
September sales
1-----~-~l 18000~ I ~~~~~~ 810000
100000

Total cash collections 541000 1 654000 1 790000 1 1985000 1

check my work ltJ eBook Link

View Hint #1 1~ 1 references

2. value:
10.00 points
... i Assu.me thaftFie.co.mi:iany.wilfprepare abud9.eted &aiance.sh.eetas of september 3o: comi:iute.the
accounts receivable as of that date. (Do not round intermediate calculations. Omit the "$" sign in
your response.)

Total accounts receivable $ 1.__4

. .:.9--=--
. : oo:. .o.:....J
: .o I
check my work ~ eBook Link .a View Hint #1 r ~ I references
 3. value:
10.00 points
ttie
direct 1abor bud9et a Krlspln corporation tor. the i.ipcomln9 fiscal year inCludes thefoilowing ................................................................................................................................
budgeted direct labor-hours.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Budgeted direct labor-hours 5,000 4,800 5,200 5,400

The company's variable manufacturing overhead rate is $1.75 per direct labor-hour and the
company's fixed manufacturing overhead is $35,000 per quarter. The only noncash item included in fixed
manufacturing overhead is depreciation , which is $15,000 per quarter.

Required:
1. Complete the company's manufacturing overhead budget for the upcoming fiscal year. (Input all
amounts as positive values. Omit the "$" sign in your response.)

Krispin Corporation
Manufacturing Overhead Budget
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
Variable manufacturing overhead $ 8750 $ 8400 $ 9100 $ 9450 $ 35700
1--------l 1--------l
Fixed manufacturing overhead 35000 35000 35000 35000 140000

Total manufacturing overhead 43750 1 43400 1 44100 1 44450 1 175700 1

Less depreciation 15000 1 15000 1 15000 1 15000 1 60000 1

Cash disbursements for

manufacturing overhead $1 28750 1 $1 28400 1 $1 29100 1 $ ,_1---=2=-=-
94--=5.0:. . 1~ $ ,_1_ _:_: 57--=-
11_:_: o~ o1

2. Compute the company's manufacturing overhead rate (including both variable and fixed
manufacturing overhead) for the upcoming fiscal year. (Round your answer to 2 decimal places.
Omit the "$" sign in your response.)

Predetermined manufacturing overhead rate $ .L-1_ _8_.6___.

11
check my work ltJ eBook Link View Hint #1 l ~ l references
 4. value:
10.00 points
- . ..... ..... ..... ..... ....................... ......... . ............. .... ................... ..... ..... ..... ..... ......... " . ..... .......... ................. ..... ..... .... ......... ........... ... . ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... ..... .... -
The budgeted unit sales of Haerve Company for the upcoming fiscal year are provided below:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Budgeted unit sales 12,000 14,000 11 ,000 10,000

The company's variable selling and administrative expenses per unit are $2.75. Fixed selling and
administrative expenses include advertising expenses of $12,000 per quarter, executive salaries of
$40,000 per quarter, and depreciation of $16,000 per quarter. In addition ,. the company will make
insurance payments of $6,000 in the 2nd Quarter and $6,000 in the 4th Quarter. Finally, property taxes
of $6,000 will be paid in the 3rd Quarter.

Required:
Prepare the company's selling and administrative expense budget for the upcoming fiscal year. (Input all
amounts as positive values. Leave no cells blank be certain to enter "0" wherever required. Omit
the"$" sign in your response.)

Haerve Company
Selling and Administrative Expense Budget
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
IVariable selling and administrative expenses I $1 33000 1 $1 38500 1 $1 30250 1 $1 27500 1 $1 129250 1

Fixed selling and administrative expenses:

Advertising 12000 12000 12000 12000 48000
Executive salaries 40000 40000 40000 40000 160000
Insurance 0 6000 0 6000 12000
Property taxes 0 0 6000 0 6000
Depreciation 16000 16000 16000 16000 64000

Total fixed selling and administrative expenses 68000 1 74000 1 74000 1 74000 1 290000 1

Total selling and administrative expenses 101000 1 112500 1 104250 1 101500 1 419250 1
ILess depreciation I 16000 1 16000 1 16000 1 16000 1 64000 1

Cash disbursements for selling and administrative expenses $1 85ooo l $1 96500 1 $1 88250 1 $1 855oo l $1 355250 1

check mJ: work ~ eBook Link ~ View Hint #1 t ~ 1 references

 5. value:
10.00 points
...............................................................................................................................................................................................................................................................................
Micro Products, Inc., has developed a very powerful electronic calculator. Each calculator requires three
small "chips" that cost $2 each and are purchased from an overseas supplier. Micro Products has
prepared a production budget for the calculator by quarters for Year 2 and for the first quarter of Year 3,
as shown below:

Year2 Year3
First Second Third Fourth First
Budgeted production, in calculators 60,000 90,000 150,000 100,000 80,000

The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large
inventories as a precaution against stockouts. For this reason, the inventory of chips at the end of a
quarter must equal 20% of the following quarter's production needs. A total of 36,000 chips will be on
hand to start the first quarter of Year 2.

Required :
Prepare a direct materials budget for chips, by quarter and in total, for Year 2. (Do not round
intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your
response.)

Micro Products, Inc.

Direct Materials Budget- Year 2
Quarter
First Second Third Fourth Year
Required production in calculators 6oooo l I 90000 1 150ooo l 100000 1 400000 1
Number of chips per calculator X 3 3 3 3 31
Production needs- chips 270000 300000 1200000
j Add I:IEnding inventory I 90000 1 48000 1 48000 1

Total needs 234000 1 360000 1 510000 1 348000 1 1248000 1

IDeduct I:IBeginning inventory I 36000 1 54000 1 90000 1 6oooo l 36000 1

Required purchases- chips 198000 1 306000 1 420000 1 288000 1 1212000 1

Total cost of purchases $1 396000 1 $1 612000 1 $I 840000 1 $1 576000 1 $1 2424000 1

6. value:
10.00 points
ciystai tefecom .. has bui:lgetecfthe saies ofhs innovative mobWe phone over the nexftour mori.ths as
follows:

Sales in Units
July 30,000
August 45,000
September 60,000
October 50,000

The company is now in the process of preparing a production budget for the third quarter. Past
experience has shown that end-of-month finished goods inventories must equal 10% of the next month's
sales. The inventory at the end of June was 3,000 units.

Required:
Prepare a production budget for the third quarter showing the number of units to be produced each
month and for the quarter in total. (Do not round intermediate calculations. Input all amounts as
positive values.)

Crystal Telecom
Production Budget
Jul~ August Se~tember Quarter
Budgeted sales in units 30000 1 45000 1 60000 1 135000 1
j Add I
~ 1: Ending inventory ~I 4500 1 6ooo l 5ooo l 5ooo l

Total needs 34500 1 51000 1 65000 1 140000 1

IDeduct I
~ 1: Beginning inventory ~I 3000 1 4500 1 6ooo l 3000 1

Required production in units 31500 1 46500 1 59000 1 137000 1

7. value:
10.00 points
seattle caCis the wholes<ile distributor ofa smali" recreational catamaran saiihoat: Managemenfhcis ..
prepared the following summary data to use in its annual budgeting process:

Budgeted unit sales 380

Selling price per unit $ 1,850
Cost per unit $ 1,425
Variable selling and administrative expenses (per
$85
unit)
Fixed selling and administrative expenses (per year) $ 105,000
Interest expense for the year $11,000

Required:
Prepare the company's budgeted income statement using an absorption income statement format shown
below. (Input all expense amounts as positive values. Omit the "$" sign in your response.)

Seattle Cat
Budgeted Income Statement
$ ~I===
7o=3o=o~
o1
~~S
- a-
le-
s---------------------.~1

[COSt of goods sold I I 5415oo I

IGross margin I 161500 1

ISelling and administrative expenses I 137300 1

INet operating income (loss) I 24200 1

IInterest expense I 11000 1

INet income (loss) $ 1_32_o__,

, _ 1_ _ o I
8. value:
10.00 points
Colerain Corporation is a merchandising company that is preparing a profit plan for the third quarter of
the calendar year. The company's balance sheet as of June 30 is shown below:

Colerain Corporation
Balance Sheet
June 30
Assets
Cash $ 80,000
Accounts receivable 126,000
Inventory 52,000
Plant and equipment, net of depreciation 200,000

Total assets $458,000

Liabilities and Stockholders' Equity

Accounts payable $ 61 ,100
Common stock 300,000
Retained earnings 96,900

Total liabilities and stockholders' equity $458,000

Colerain's managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $200,000, $220,000, $210,000, and
$230,000 , respectively.
2. All sales are on credit and all credit sales are collected. Each month's credit sales are collected 30%
in the month of sale and 70% in the month following the sale. All of the accounts receivable at June
30 will be collected in July.
3. Each month's ending inventory must equal 40% of the cost of next month's sales. The cost of goods
sold is 65% of sales. The company pays for 50% of its merchandise purchases in the month of the
purchase and the remaining 50% in the month following the purchase. All of the accounts payable at
June 30 will be paid in July.
4. Monthly selling and administrative expenses are always $65,000. Each month $5,000 of this total
amount is depreciation expense and the remaining $60,000 relates to expenses that are paid in the
month they are incurred.
5. The company does not plan to borrow money or pay or declare dividends during the quarter ended
September 30. The company does not plan to issue any common stock or repurchase its own stock
during the quarter ended September 30.

Required:
1. Prepare a schedule of expected cash collections for July, August, and September. Also compute total
cash collections for the quarter ended September 30th. (Do not round intermediate calculations.
Leave no cells blank be certain to enter "0" wherever required. Omit the "$" sign in your
response.)

Schedule of Expected Cash Collections

JU)'
I A ugust Septem ber Q uarter
From accounts receivable $1 126000 1 $ 0 $ 0 $1 126000 1
From July sales
6000~ 1 140000 0 200000
From August sales I 66000 154000 220000
From September sales I ol 0 63000 I 63000 1

Total cash collections 186000 1 206000 1 217000 1 609000 1

2a. Prepare a merchandise purchases budget for July, August, and September. Also compute total
merchandise purchases for the quarter ended September 30th. (Input all amounts as positive
values. Do not round intermediate calculations. Omit the "$" sign in your response.)

Merchandise Purchases Budget

Jul)' August Se~tember Total
Budgeted cost of goods sold $1 130000 1 $1 143000 1 $I 136500 1 $1 409500 1
I Add: II Ending inventory I I 57200 1 I 54600 1 I 59800 1 I 59800 1

Total needs 187200 1 197600 1 I 196300 1 469300 1

I Deduct: " II Beginning inventory 'f l 52000 1 57200 1 I 54600 1 52000 1

Required purchases $1 135200 1 $1 140400 1 $1 141700 1 $1 417300 1

2b. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August,
and September. Also compute total cash disbursements for merchandise purchases for the quarter
ended September 30th. (Do not round intermediate calculations. Leave no cells blank - be
certain to enter "0" wherever required. Omit the "$" sign in your response.)

Schedule of Expected Cash Disbursements-Merchandise Purchases

July August Se~tember Total
From accounts payable $ 1==,;;,6 11,.;;,
,;.. 090 $ 0 $ 1 ol $ 1==,;;,
6 11,.;;,
.;.. 090

7020~
For July purchases 67600 67600 135200
For August purchases 0 70200 I I 140400
For September purchases I 7o85o 1 70850 1

Total cash disbursements 128700 1 137800 1 141050 1 407550 1

3. Prepare an income statement for the quarter ended September 30th. (Input all amounts as positive
values except losses which should be indicated by a minus sign. Do not round intermediate
calculations. Leave no cells b lank be certain to enter "0" wherever required. Omit the "$" sign
in your response.)

Colerain Corporation
Income Statement
For the Quarter Ended September 30
! Sales I $1 630000 1
[CO"st of goods sold I I 409500 1

( Gross margin ] 220500 1

~lling and administrative expenses TJ 195000]

( Net operating income (loss) I 25500 1

l lnterest expense
"'] c ol

[ Net income (loss) I $l 25500]

4. Prepare a balance sheet as of September 30th . (Be sure to list the assets and liabilities in order
of their liquidity. Do not round intermediate calculations. Omit the"$" sign in your response.)

Colerain Corporation
Balance Sheet
September 30
Assets
[ cash 7J $[ 101450 1
( Acco_u_n-:-
ts- r-ec-e-:-
iv-a-:-:
ble [ 147000]
[Plant and equipment, net
u nventory [- 185,000
59,800
j
Total assets $[ 493250 ]

Liabilities and Stockholders' Equity

(Accounts payable 7Q85Ql

( Capital stock 300000]
( Retained earnings 1224Q6l

Total liabilities and stockholders' equity 493250 ]

 [The following information applies to the questions display ed bel o w)

The production manager of Junnen Corporation has submitted the following forecast of units to be
produced for each quarter of the upcoming fiscal year.

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Units to be produced 5,000 4,400 4,500 4,900

Each unit requires 0.40 direct labor-hours and direct labor-hour workers are paid $11 per hour.

9. value:
10.00 points
Reciuire&
1. Complete the company's direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is adjusted each quarter to match the number of hours required to produce the
forecasted number of units produced. (Omit the "$" sign in your response.)

Junnen Corporation
Direct Labor Budget
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
Total direct labor hours needed 2000 1760 1 1800 1960 7520
Total direct labor cost $ 22000 $1 19360 : $ 19800 $ ~=,:...:
82::.:,.7-=,
20;d

check my work ~ eBook link View Hint #1 1~J references

1Q value:
10.00 points
OO OOOOOO OOOOOO OOOOOO OOOOOO OOOOOOOO OOOOOO OOOOOOOO OOOOOO OOOOOOOO O>OOOOOO OOOOOO OOOOOO OOOOOO OOOOOO OOOOOOOO O>OOOOOO OOOOOO OOOOOOOO OOOOOOOO OOOOOO OOOOOO OOOOOOOO OOOOOOOO OOOOOO OOOOOOOO OOOOOO OOOOOO OOOOOO M . . OO

2. Complete the company's direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor
workforce consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of
~ work each quarter. If the number of required direct labor-hours is less than this number, the workers
~ are paid for 1,800 hours anyway. Any hours worked in excess of 1,800 hours in a quarter are paid at
the rate of 1.5 times the normal hourly rate for direct labor. (Leave no cells blank be certain to
enter "0" wherever required. Omit the "$" sign in your response.)

Junnen Corporation
Direct Labor Budget
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
17~ 19~
Total direct labor hours needed
Regular hours paid E= 2000 1
1800 t= 1800 E= ~ 1800 t= 1800 E= 7520 1
7200

Overtime hours paid l 200 ] l OJ l oJ l 16o] l 360]

Wages for regular hours

$ t-
19800J $[ 1980~] $t- 1980~] $~ 1980~] $ t-
79200]
Overtime wages 3300 2640 5940

Total direct labor cost $ r-= 23100] $[ - 19800J $ r-= 19800l $L 22440J $~ 85140l
11 . value:
10.00 points
The management of Academic 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
Balances
Cash ?
Accounts receivable $ 6,500
Supplies inventory $ 2,100
Equipment
$ 28,000
Accumulated depreciation $ 9,000
Accounts payable $ 1,900
Common stock $ 4,000
Retained earnings ?

The beginning balance of retained earnings was $21 ,000, net income is budgeted to be $8,600, and
dividends are budgeted to be $3,500.

Required:
Prepare the company's budgeted balance sheet. (Be sure to list the assets and liabil ities in order of
their liquidity. Amounts to be deducted s hould be indicated with minus sign. Omit t he"$" sign in
your response.)

Academic Copy
Budgeted Balance Sheet
Assets
Current assets:
ICash $ ~1====~
4400 1
IAccounts receivable I 65oo l
ISupplies inventory 2100 1

Total current assets $I 13000 1

Plant and equipment:
IEquipment ., I 28000 1
IAccumulated depreciation ., I -9ooo 1

Plant and equipment, net 19000 1

Total assets $I 32000 1

Liabilities and Stockholders' Equity
Current liabilities:
IAccounts payable .. , $I 1900 1
Stockholders' equity:
ICommon stock .. I 4000 1
IRetained earnings .. I 26100 1

Total stockholders' equity 30100 1

Total liabilities and stockholders' equity $1 32000 1

 12. value:
10.00 points
- ...........................................................................................................................................................................................
Forest Outfitters is a retailer that is preparing its budget for the upcoming fiscal year. Management has
prepared the following summary of its budgeted cash flows:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total cash receipts $340,000 $670,000 $410 ,000 $470,000
Total cash disbursements $530,000 $450,000 $430,000 $480 ,000

The company's beginning cash balance for the upcoming fiscal year will be $50,000. The company
requires a minimum cash balance of $30,000 and may borrow any amount needed from a local bank at a
quarterly interest rate of 3% . The company may borrow any amount at the beginning of any quarter and
may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any
principal at the time it is repaid .

Required :
Complete the company's cash budget for the upcoming fiscal year. (Input all amounts as positive
values except cash deficiency, repayments, and interest, which should be indicated by a minus
sign . Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your
response.)

Forest Outfitters
Cash Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Cash balance, beginning $ 50000 $ 30000 $ 69800 $ 49800 $ 50000
Total cash receipts 340000 670000 410000 470000 1890000

Total cash available 390000 1 700000 1 479800 1 519800 1 1940000

Less total cash disbursements 530000 1 450000 1 430000 1 480000 1 1890000

Excess (deficiency) of cash available over disbursements -14oooo 1 250000 1 49800 1 39800 1 5oooo l

Financing:
Borrowings (at beginning) 170000 1 ol ol ol 170000

~I ~I ~I
Repayments (at ending) -170000 -170000
Interest -10200 -10200

Total financing 170000 1 -18o2oo 1 ol ol -1o2oo I

Cash balance, ending $1 30000 1 $ 1 69800 1 $ 1 49800 1 $ 1 39800 1 $1 39800 1

 120 out of 120 points (100%)