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Problem InformationSales Operating expenses: Variable expenses Fixed expenses Total expenses Operating income Targeted operating income =Increase in variable cost =RequirementsSolution BackgroundBudgeted sales: December JanuaryCollections of A/R: Collected in month of sale Collected following month Est B/D expense Discount for early paymentGross margin %Target End Inv, as % of following month's sales Merchandise payments: % paid in month following month of purchaseOther operating expenses (cash) =Annual depreciation expense =Kelly Company's statement of financial position at the close of business on November 30th follows: KELLY COMPANYStatement of Financial PositionAssets Cash Accounts receivable (net of $4,000 allowance for doubtful accounts) Inventory Property, plant, and equipment (net of $680,000 accumulated depreciation)Total assetsLiabilities and Stockholders' Equity Accounts payable Common stock Retained earningsTotal liabilities and equity1. What is the total of budgeted cash collections for December?2. How much is the book value of accounts receivable at the end of December?3. How much is the income (loss) before income taxes for December?4. What is the projected balance in inventory on December 31, 2013?5. What are budgeted purchases for December?6. What is the projected balance in accounts payable on December 31, 2013?SolutionKelly CompanyBudgeted Cash Collections for DecemberFrom November’s sales = net A/R, November 30th =Budgeted cash collections--DecemberNet Accounts Receivable--December 31stBudgeted sales in December (given)Net A/R from sales in DecemberNet Accounts Receivable--December 31st Budgeted Pre-Tax Operating Income--DecemberTotal sales Gross margin ratioGross marginMonthly cash operating expensesBad-debts expense Depreciation expensePre-tax operating incomeBudgeted Inventory--December 31stBudgeted Purchases--DecemberInventory, December 1st (given)Cost of goods available for saleLess: Cost of goods sold$220,000 × 75% =Inventory, December 31st (part 4 above)Budgeted Accounts Payable--December 31stTotal Accounts Payable During DecemberLess: Payments in December (entire beginning balance)Budgeted Accounts Payable, December 31st Alternatively, the end-of-December Accounts Payable Balance = Purchases made in December = answer to Part 5 above. Exercise 9-33: CVP Analysis Student TemplateYour Name ===>\NOTE: You MUST input the computations. Just entering the answer will NOT meet the assignment requirements.Input the Excel Formulas!Plus: Purchases during December (THIS is the amount to determine here) Collections of December sales in December =Compute using 2%Compute per given:this column.This columnwill auto-matically fill-in:Fill in these amounts in v---vREMEMBER: You MUST input your work.Use formulas to indicate your understanding.From December’s sales = (Remember the Discount!) = Allowance for doubtful accounts (Given as 2% of Sales) =Inventory, December 31st (Remember, Inventory valued at COST) =Accounts Payable, December 1st (given)Plus: Budgeted Purchases, December (part 5 above)Part 1 ==>Part 2 ==>Part 3 ==>Part 4 ==>Part 5 ==>Part 6 ==>Problem 10-50: Budgeting for a Merchandising Firm Student TemplateNOTE: Be sure that you add your NAME to the filename when you save & submit it to your dropbox.Add Cells E75 to 77 in F77
Problem 10-50: Budgeting for a Merchandising Firm Student and Exercise 9-33: CVP Analysis Student

Problem 10-50: Budgeting for a Merchandising Firm Student and Exercise 9-33: CVP Analysis Student

Question # 00114164 Posted By: donnaanderson30 Updated on: 10/07/2015 02:03 PM Due on: 10/12/2015
Subject Accounting Topic Accounting Tutorials:
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Problem 10-50: Budgeting for a Merchandising Firm Student Template
Background 0
Budgeted sales:
December $2,20,000
January $2,00,000
Collections of A/R:
Collected in month of sale 60.00%
Collected following month 38.00% REMEMBER: You MUST input your work.
Est B/D expense 2.00% Use formulas to indicate your understanding.
Discount for early payment 1.00%
Gross margin % 25%
Target End Inv, as % of following month's sales 80.00%
Merchandise payments:
% paid in month following month of purchase 100.00%
Other operating expenses (cash) = $22,600
Annual depreciation expense = $2,16,000
Kelly Company's statement of financial position at the close of business on November 30th follows:
KELLY COMPANY
Statement of Financial Position
November 30, 2013
Assets
Cash $22,000
Accounts receivable (net of $4,000 allowance for doubtful accounts) $76,000
Inventory $1,32,000
Property, plant, and equipment (net of $680,000 accumulated depreciation) $8,70,000
Total assets $11,00,000
Liabilities and Stockholders' Equity
Accounts payable $1,62,000
Common stock $8,00,000
Retained earnings $1,38,000
Total liabilities and equity $11,00,000
Requirements
1. What is the total of budgeted cash collections for December?
2. How much is the book value of accounts receivable at the end of December?
3. How much is the income (loss) before income taxes for December?
4. What is the projected balance in inventory on December 31, 2013?
5. What are budgeted purchases for December?
6. What is the projected balance in accounts payable on December 31, 2013?





 

Exercise 9-33: CVP Analysis Student Template
Problem Information Your Name ===> NOTE: Be sure that you add your NAME to the filename when you save & submit it to your dropbox.
\
Sales $ 460,00,000
Operating expenses:
Variable expenses 322,00,000
Fixed expenses 75,00,000
Total expenses 397,00,000
Operating income $ 63,00,000
Targeted operating income = $ 80,00,000
Increase in variable cost = 12.00%
Requirements





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