The Master Budget and Responsibility Accounting. Chapter 22 . Why Managers Use Budgets. To plan and control actions and the related revenues and expenses To incorporate management’s strategic and operational plans Planning technology upgrades
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Depreciation is a non-cash expense
Insurance was prepaid in the prior quarter
8. Greg’s plans to purchase a used delivery truck in April for $3,000 cash.
9. Greg’s requires a minimum cash balance of $10,000 before financing at the end of each month.
Refer to the Grippers sales budget that you prepared in S22-3. Now assume that Grippers’ sales are collected as follows:
November sales totaled $400,000 and December sales were $425,000.
50% in the month of the sale
30% in the month after the sale
18% two months after the sale
2% never collected
Prepare a schedule for the budgeted cash collections for January and February. Round answers to the nearest dollar.
Refer to the Grippers inventory, purchases, and cost of goods sold budget your prepared in S22-4. Assume Grippers pays for inventory purchases 50% in the month of purchase and 50% in the month after purchase.
Prepare a schedule for the budgeted cash payments for purchases for January and February.
Grippers has $12,500 in cash on hand on January 1. Refer to S22-5 and S22-6 for cash collections and cash payment information. Assume Grippers has cash payment for operating expenses including salaries of $50,000 plus 1% of sales, all paid in the month of sale. The company requires a minimum cash balance of $10,000.
Prepare a cash budget for January and February. Will Grippers need to borrow cash by the end of February?
Maplehaven Sporting Goods Store has the following sales budget:
Suppose June sales are expected to be $80,000 rather than $64,000.
Goal is to control cost
Goal is to increase revenues
Goal is to increase profits
Goal is to increase ROI, EVA, & residual income