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Activity No. 4 - Attach Your Activity With The Filename SURNAME - SECTION - ACT#4

The document contains three activities related to budgeting and cash flow forecasting: 1) Calculating budgeted cash receipts and disbursements for March and April for a company. 2) Filling in missing amounts in a cash budget table for quarters 1-4 of a retail company. 3) Preparing a budgeted income statement for March 2021 for a company using a continuous improvement approach where costs and expenses decline by 5% each month.

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75 views3 pages

Activity No. 4 - Attach Your Activity With The Filename SURNAME - SECTION - ACT#4

The document contains three activities related to budgeting and cash flow forecasting: 1) Calculating budgeted cash receipts and disbursements for March and April for a company. 2) Filling in missing amounts in a cash budget table for quarters 1-4 of a retail company. 3) Preparing a budgeted income statement for March 2021 for a company using a continuous improvement approach where costs and expenses decline by 5% each month.

Uploaded by

-st3v3craft-
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Activity no.

4 – Attach your activity with the filename SURNAME_SECTION_ACT#4

Name: Denver John P. Labayen Student #: 202011912


Course, Year & Section: BSIE 2-2

1. The information pertains to Nue Inc. sales revenue is presented below:


February March April
Cash sales 160,000 150,000 120,000
Credit sales 300,000 400,000 280,000
Total sales 460,000 550,000 400,000

Management estimates the 10% are of credit sales are uncollectible. 65% of that credit sales are collected
on the month of that sale and the remainder are collected in the following month of sale. Cost of purchases
of inventory each month is 60% of the next month’s projected total sales. All purchases of inventory are on
account, 35% are paid on the month of purchases and the remainder is paid in the month following the
purchase.
Required:
a) Calculate the budgeted cash receipts in the month of March and April

Cash Receipts Budget March April

Cash sales 150,000.00 120,000


Collection from Credits Sales
February 300,000*25%=75,000
March 400,000*65%=260,000 400,000*25%=100,000
April 280,000*65%=182,000

Total cash Receipts 485,000 402,000

b) Calculate the budgeted cash disbursement in the month of March and April.

Cash Disbursements Budget March April

Cash Payment for Purchases


February 460,000*60%*65%=179,400 550,000*60%*65%=214,500

March 550,000*60%*35%=115,500 400,000*65%*35%=84,000

2. Andros Company, an entity engage is retail prepared a cash budget for each quarter of the year. They
maintain a minimum cash balance of P5,000 to start each quarter.
QUARTER
1 2 3 4 Year
Cash balance, beginning 9 5 5 5 9
Add: collections from customers 76 90 125 100 391
Total cash available 85 95 130 105 400
Less: Disbursements
Purchase of inventory 40 58 ? 32 ?
Operating expenses ? 42 54 ? 180
Equipment purchases 10 8 8 ? 36
Dividends 2 2 2 2 8
Total disbursements 88 110 100 92 390

Excess (deficit) of cash available -3 -15 30 13 10

Financing:
Borrowings 8 20 - - 28
Repayments (including interest) - - -25 -7 -32
Total financing 8 20 -25 -7 -4
Cash balance, ending 5 5 5 6 6

Required: Fill the missing amounts.

3. Willy Wonka Corp. is using a kaizen approach to budgeting for 2021. The budgeted income statement
for January 2021 are as follows:

Sales (300,000 units) 930,000


Less: Cost of Goods Sold 570,000
Gross Margin 360,000
Operating Expenses (includes 69,000 fixed costs) 200,000
Net Income 160,000

Under this approach the cost of goods sold and the operating expenses are budgeted to decline by 5%
every month.
Required: Prepared a budgeted income statement for March 2021.
Willy Wonka Corporation
Budgeted Income Statement
For the Three Months Ended in March 2021

Sales (300,000 units) 930,000


Cost of Goods Sold 514,425
Gross Margin 415,575
Operating Expenses 200,000
Net Income 215,575

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