Question

Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information Wolfpack Company Balance Sheet June 30 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets 87,400 50,200 44,400 246,000 $428,006e Liabilities and Stockholders Equity Accounts payable Common stock Retained earnings $36,006 100,000 292,000 Total liabilities and stockholders' equity $428,000 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. The accounts payable at June 30 will be paid in July 3. The budgeted inventory balance at July 31 is $35,100 4. Depreciation expense is $4,920 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 $87,100, expected cash disbursements for merchandise purchases of $48,900, and cash paid for selling and administrative expenses of $19,680 Required 1. 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 Complete this question by entering your answers in the tabs below. Required 1A Required 1BReqred 1C Required 1D Required 2 Calculate the budgeted sales for month of July Budgeted sales for July Required 1ARequired 1BRequired 1C Required 1D Required 2 Calculate the budgeted merchandise purchases for month of July Budgeted merchandise purchases for July Required 1A Required 1C > Complete this question by entering your answers in the tabs below. Required 1A Required 1BRequired 1CRequired 1D Required 2 Calculate the budgeted cost of goods sold for month of July. Budgeted cost of goods sold for July Required 1A Required 1B Required 1C Required 1D Required 2 Calculate the budgeted net operating income for month of July. Budgeted net operating income for July

Answer 1

Calculation of budgeted sales
Cash collection for july			87100
less: accounts receivable			50200
collection from sales			36900
budgeted sale = 36900/30% = 123000
Calculation of merchandise purchases
Cash disburesement july			48900
less: accouts payable			36000
cash paid for july			12900
Budgeted merchandise purchase = 12900/20% =64500
Cost of goods sold
inventory at beginning			44400
Add: Purchase			64500
less: inventory at end			35100
Cost of goods sold			73800
Budgeted net operating income
sale			123000
less: cost of goods sold			73800
Depreciation			4920
selling & adm exp			19680
net income			24600
Balance sheet
assets
cash (87400+87100-48900-19680)			105920
accounts receivable (123000*70%)			86100
inventory			35100
building & equipment			241080
Total assets			468200
Laibilities & stock holder equity
Accounts payable (64500*80%)			51600
Common stock			100000
retained earning (292000+24600)			316600
total laibilities			468200

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