第十五版710章答案Word格式.docx
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Rent,taxesandotherfixedexpenses33,000106,500
Incomefromoperations.$7,500
Interestexpense*1,338
Netincome$6,162
*Seeschedulegforcalculationofinterest.
ExhibitII
CashBudget
JuneJulyAugust
Beginningcashbalance$5,800$5,600$5,079
Minimumcashbalancedesired5,0005,0005,000
(a)Availablecashbalance$800$600$79
Cashreceipts&
disbursements:
Collectionsfromcustomers
(scheduleb)$75,200$121,400$90,800
Paymentsformerchandise
(scheduled)(86,800)(49,600)(49,600)
Fixtures(purchasedinMay)(11,000)--
Paymentsforoperating
expenses(schedulef)(44,600)(30,200)(30,200)
(b)Netcashreceipts&
disbursements$(67,200)$41,600$11,000
Excess(deficiency)ofcashbefore
financing(a+b)(66,400)42,20011,079
Financing:
Borrowing,atbeginningofperiod$67,000$-$-
Repayment,atendofperiod-(41,000)(10,000)
Interest,10%perannum-(1,121)*(217)*
(c)Totalcashincrease(decrease)
fromfinancing$67,000$(42,121)$(10,217)
(d)Endingcashbalance(beginning
balance+b+c)$5,600$5,079$5,862
*Seescheduleg
ExhibitIII
BudgetedBalanceSheet
August31,20X8
AssetsLiabilitiesandOwners’Equity
Cash(ExhibitII)$5,862Accountspayable$37,200
Accountsreceivable*86,400Notespayable16,000**
Merchandiseinventory37,200Totalcurrentliabilities$53,200
Totalcurrentassets$129,462
Netfixedassets:
Owners'
equity:
$33,600less$102,200plusnet
depreciationof$1,50032,100incomeof$6,162108,362
Totalassets$161,562Totalequities$161,562
*Julysales,20%×
90%×
$80,000$14,400
Augustsales,100%×
$80,00072,000
Accountsreceivable$86,400
**Seescheduleg
JuneJulyAugustTotal
Schedulea:
SalesBudget
Creditsales(90%)$126,000$72,000$72,000$270,000
Cashsales(10%)14,0008,0008,00030,000
Totalsales(toExhibitI)$140,000$80,000$80,000$300,000
Scheduleb:
CashCollections
JuneJulyAugust
Cashsales$14,000$8,000$8,000
Onaccountsreceivablefrom:
Aprilsales10,800--
Maysales50,40012,600-
Junesales-100,80025,200
Julysales--57,600
Totalcollections(toExhibitII)$75,200$121,400$90,800
Schedulec:
PurchasesBudgetMayJuneJulyAugust
Desiredpurchases:
62%×
nextmonth'
ssales$86,800$49,600$49,600$37,200
Scheduled:
DisbursementsforPurchasesJuneJulyAugust
Lastmonth'
spurchases(toExhibitII)$86,800$49,600$49,600
Otherrequireditemsrelatedtopurchases
Accountspayable,August31,2008
(62%×
Septembersales-toExhibitIII)$37,200
Costofgoodssold(toExhibitI)$86,800$49,600$49,600
Schedulee:
OperatingExpenseBudget
Salaries,wages,commissions$28,000$16,000$16,000$60,000
OtherVariableexpenses5,6003,2003,20012,000
Fixedexpenses11,00011,00011,00033,000
Depreciation5005005001,500
Totaloperatingexpenses$45,100$30,700$30,700$106,500
Schedulef:
PaymentsforOperatingExpenses
JuneJulyAugust
Variableexpenses$33,600$19,200$19,200
Fixedexpenses11,00011,00011,000
Totalpaymentsforoperatingexpenses$44,600$30,200$30,200
Scheduleg:
Interestcalculations
JuneJulyAugust
Beginningbalance$67,000$67,558$26,000
Monthlyinterestexpense@10%558563217
Endingbalancebeforerepayment$67,55868,12126,217
Principalrepayment(from
statementofreceiptsanddisbursements)(41,000)(10,000)
Interestpayment(1,121)(217)
Endingbalance$26,000$16,000
2.Thisisanexampleoftheclassicshort-term,self-liquidatingloan.Theneedforsuchaloanoftenarisesbecauseoftheseasonalnatureofabusiness.Thebasicsourceofcashisproceedsfromsalestocustomers.Intimesofpeaksales,thereisalagbetweenthesaleandthecollectionofthecash,yetthepayrollandsuppliersmustbepaidincashrightaway.Whenthecashiscollected,itinturnmaybeusedtorepaytheloan.Theamountoftheloanandthetimingoftherepaymentareheavilydependentonthecredittermsthatpertaintoboththepurchasingandsellingfunctionsofthebusiness.
7-25Akeytoemployeeacceptanceofabudgetisparticipation.Budgetscreatedwiththeactiveparticipationofallaffectedemployeesaregenerallymoreeffectivethanbudgetsimposedonsubordinates.Ifabudgetistohelpdirectfutureactivities,employeesmustacceptthebudget.Acceptancemeansbelievingthatthebudgetreflectsadesiredfuturepathfortheorganization.Ifamanagerhasbeenaparticipantindeterminingthefuturepath–thatis,helpeddevelopthebudget–heorsheismorelikelytoacceptitasadesirableobjective.
7-36(20-25min.)ThecollectionsfromMarchsalesareabittricky.NotethatthereceivablebalancefromMarchsalesatMarch31is$450,000;
therefore,fourfifths(because40/50willbecollectedinApriland10/50willbecollectedinMay)willbereceivedinApril.
MERRILLNEWSANDGIFTS
BudgetedStatementofCashReceiptsandDisbursements
FortheMonthEndingApril30,20X7
Cashbalance,March31,20X7$100,000
Addreceipts,collectionsfromcustomers:
FromAprilsales,1/2×
$1,000,000$500,000
FromMarchsales,4/5×
$450,000360,000
FromFebruarysales80,000940,000
Totalcashavailable$1,040,000
Lessdisbursements:
Merchandisepurchases,$450,000×
40%$180,000
Paymentonaccountspayable460,000
Payrolls90,000
Insurancepremium1,500
Otherexpenses45,000
Repaymentofloanandinterest97,200873,700
Cashbalance,April30,20X7$166,300
7-40(25-30min.)
1.Anoptimisticpreliminarybudgetmightbeasfollows,assuminglevelsalesvolume,a$.94perpoundprice,anda2%decreaseinvariablecosts.
Sales,1.6millionpounds@$.94/pound$1,504,000
Variablecosts(862,400)
Fixedcosts,primarilydepreciation(450,000)
Pretaxprofit$191,600
Thisbudgetdoesnotmeetthe$209,000profitgoal.StarkhasadilemmaofsubmittingarealisticbudgetthatdoesnotmeetPhilp'
sgoalorpreparinganunrealisticbudget.Thefollowingbudget,whichassumesthatpriceswillnotfall,saleslevelswillbemaintained,andsomefixedcostswillbesaved,wouldmeettheprofittarget.AlthoughStarkdoesnotbelievetheassumptions,shemightfeelpressuretosubmitit(orsomethingsimilar)toheadquarters:
Sales,1.6millionpounds@$.95/pound$1,520,000
Variablecosts,.98×
$880,000(862,400)
Fixedcosts,primarilydepreciation(448,600)*
Pretaxprofit$209,000
*$1,520,000-$862,400-$209,000
2.Twomajorproblemsarethearbitrarysettingofbudgettargetsbytopmanagementwithoutregardtowhetherthetargetscanbeachievedandthedraconianmeasuresusedwhenabudgetisnotmet,eveniftheshortfallissmallorreasonableexplanationsfortheshortfallaregiven.
3.Apparentlythepreliminaryfinancialresultsareasfollows:
Sales,1.6millionpounds@$.945/pound$1,512,000
Pretaxprofit$199,600
Extendingthedepreciablelivesoffixedassetsby2yearscouldincreasethisprofitby$15,000to$214,600,wellabovethetarget.Butdoingsowouldbemanipulatingtheaccountingsystemtoachievedesirableresults.Whentheestimatesofdepreciableliveswerefirstmade,theremayhavebeenmuchuncertaintyintheestimates.However,changingtheaccountingmethodtomakethefinancialresultslookbetterisanethicalviolation.
Managersshouldnotchangeaccountingmethodsjusttomaketheirperformancelookbetter(orinthiscase,tosavetheirjob).Althoughchangingthedepreciationscheduleisnotethical,itiseasytoseehowthebudgetingprocesscreatesanincentiveforsuchunethicalbehavior.Ifthebudgetandreportingprocessmakesexcellentperformanceappeardeficient,theremaybegreattemptationformanagerstocheatthesystem.
7-43(80-100min.)
1.OnJanuary1,SaltLakeLightOperaneedstoborrow$2,057,000,onApril1itneedsanadditional$562,000,onSeptember31itcanrepay$2,014,000,butonOctober1itmustagainborrow$726,000.Thiscanbeseenfromthefollowinganalysis(inthousandsofdollars):
Qtr.1Qtr.2Qtr.3Qtr.4
Beginningcashbalance208200200200
Minimumcashbalancedesired200200200200
Availablecashbalance8000
Cashreceipts&
disbursement:
Collectionsfromcustomers
(1)8831,8934,5042,024
Paymentsforsupplies
(2)(780)(200)
Otherexpenses(3)(30)(30)(30)(30)
Paymentsforpayroll(4)(2,046)(2,100)(2,100)(2,100)
Majorequipment(5)(100)(300)
Smallequipment(6)(60)(60)(60)(60)
Mortgageprincipal(7)(125)(125)
Mortgageinterest(8)(140)(135)
Interestonworkingcapital(9)(32)
Netcashreceipts&
disbursements(2,065)(562)2,014(726)
Excess(deficiency)ofcash
beforefinancing(2,057)(562)2,014(726)
Financing:
Borrowing(atbeginningofquarter)2,057562726
Repayment(atendofquarter)(2,014)
Totalcashincrease(decrease)
fromfinancing2,057