Question

2. Prepare a budgeted balance sheet as of July 31.

Help Save&ExitSubm Check my work halance Sheet June 30 Assets Cash 79,200 68,600 40,200 Accounts receivable Inventory Buildings and equipment,net of depreciation213,000 Total assets Liabilities and Stockholders' Equity Accounts payable Conmon stock 401,000 56,00o 100,000 Total liabilities and stockholders equity s 401,000 Budgeting Assumptions: 1. All sales are on account. Thirty percent of the credit sales are collected in the month of sale and the remaining 70% are collected in the month subsequent to the sale. The accounts receivable at June 30 will be collected in July 2. All merchandise purchases are on account. Twenty percent of merchandise inventory purchases are paid in the month of the purchase and the remaining 80% is paid in the month after the purchase. 3. The budgeted inventory balance at July 31 is $25,700 4 Depreciation expense is $4.260 per month. All other selling and administrative expenses are paid in full in the month the expense is incurred 5. The company's cash budget for July shows expected cash collections of $106,100, expected cash disbursements for merchandise purchases of $68,100, and cash paid for selling and administrative expenses of $20,740 Required . For the month of July, calculate the following a. Budgeted sales b. Budgeted merchandise purchases c Budgeted cost of goods sold d. Budgeted net operating income 2. Prepare a budgeted balance sheet as of July 31 Prev2 of 2

Answer 1

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Statement Showing Budgeted sales for July
Detail	Amount
Expected cash Collection in July	$106,100
Account receivable as on June30	-$68,600
Cash Collection for July Sales	$37,500
Total Budgeted Sales in July	$125,000
($37500/30%)
Statement Showing Budgeted Merchandised Purchase for July
Detail	Amount
Expected cash disbursement in July for Merchandised Purchase	$68,100
Account payable as on June30	-$56,000
Cash disbursement for July Purchase	$12,100
Total Merchandised Purchsed in July	$60,500
($12100/20%)
Statement Showing Budgeted Cost of Goods Sold for July
Detail	Amount
Beginning Bal of Inventory	$40,200
Inventory Purchased in July	$60,500
Closing Bal of Inventory as on 31 Jul	-$25,700
Cost of Goods Sold for July	$75,000
Statement Showing Budgeted Net Operating Income for July
Detail	Amount
Sales	$125,000
Less: COGS	-$75,000
Gross Profit	$50,000
Less: Selling & Admin	-$20,740
Depreciation	-$4,260
Net Operating Income	$25,000
WolfPack Company
Budgeted Balance sheet as on 31 July
Detail	Amount
Asset
Cash	$96,460
Account Receivable ( $125000*70%)	$87,500
Inventory	$25,700
Net Building & Equipment($213000-4260)	$208,740
Total Asset	$418,400
Liabilities & Shareholder Equity
Account Payable ( $60500*80%)	$48,400
Retained Earning( $245000+25000)	$270,000
Common Stock	$100,000
Total Liabilities & Shareholder Equity	$418,400
Working Note for Cash Balance as 31st July
Detail	Amount
Opening Balance	$79,200
Expected Cash Collection	$106,100
Less: Expected Cash Disbursement	-$68,100
Less: Selling and Admin	-$20,740
Closing Cash Balance as on 31st July	$96,460