70.2K

Verified Solution

Link Copied!

Please answer all parts under required. Photos of both of the empty balance sheets are shown below.

The company is in the process of preparing a budget for October and has assembled the following data: 1. Sales are budgeted at $400,000 for October and $410,000 for November. Of these sales, 35% will be for cash: the remainder will be credit sales. Forty percent of a month's credit sales are colfected in the month the sales are made, and the remaining 60% is collected in the following month. All of the September 30 accounts recelvable will be collected in October. 2. The budgeted cost of goods sold is olways 45% of sales and the ending merchandise inventory is always 30% of the following month's cost of goods sold. 3. All merchondise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70\% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. 4. Selling and odministrative expenses for October are budgeted ot $86.000, exclusive of depreciation. These expenses will be paid in cash: Depreciation is budgeted at $2790 for the month. Required 1. Using the information provided, calculote or prepare the following a. The budgeted cosh collections for October. b. The budgeted merchondise purchases for October. c. The budgeted cash dikbursements for merchandise purchases for October. d. The budgeted net operoting income for October. e. A budgeted bolonce sheet at October 31 2. Assume the following changes to the underlying budgeting assumptions: (1) 50% of a month's credit sales are collected in the month the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month. Using these new assumptions, calculate or prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October c. The budgeted cash disbursements for merchandise purchases for October. d. Net operating income for the month of October. e. A budgeted balance sheet at October 31 . Complete this question by entering your answers in the tabs below. Prepare the budgeted cash collections for October. Prepare a budgeted balance sheet at October 31. Prepare a budgeted balance sheet at October 31. Assume that 50% of a month's credit sales are collected in the morith the sales are made and the remaining 50% is collected in the following month, (2) the ending merchandise inventory is always 10% of the following month's cost of goods sold, and (3) 20% of all purchases are paid for in the month of purchase and 80% are paid for in the following month

Answer & Explanation Solved by verified expert

See Answer