Complete the Case Study. Directions and check figures in PDF. Use the Excel template provided!

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EurggO

Business Finance

Description

Please follow the directions located in the PDF file attached. I have provided an Excel template for you so please just download it and use that to fill in all of your answers. Please be absolutely sure that your answers are correct. There are check figures provided for each part in the PDF I have attached so if your numbers don't add up to it then you know that one or more of your answers is incorrect. If you have any further questions please let me know. Thanks!

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1. Sales Budget: Johnson Inc. sells high-tech staplers. Johnson is preparing budgets for the quarter ending September 30, 2017. The sales price is $35 per stapler. Johnson expects the following number of units to be sold in the coming year: July August September October 12,000 14,000 14,500 15,000 Required: Prepare a sales budget for the third quarter of the coming year, showing units and sales revenue by month and in total for the quarter. Check Figure: Total projected sales revenue for the quarter - $1,417,500 2. Production Budget: Johnson wants ending inventory to be 25 percent of the next month’s budgeted sales in units. 3,000 units were on hand June 30. Required: Prepare a production budget for the third quarter of the year. Show the number of staplers that should be produced each month as well as for the quarter in total. Check Figure: Total budgeted product units to produce for the quarter – 41,250 3. Materials Purchases Budget: Two sheets of metal are required to produce a single stapler. Johnson wants to have materials on hand at the end of each month equal to 10 percent of the following month’s production needs. The materials inventory on June 30 is 2,500 sheets of metal. October production is budgeted for 15,125 units. Required: Prepare a direct materials purchases budget for metal sheets for the quarter ending September 30. Show how many sheets of metal should be purchased each month as well as for the quarter in total. Check Figure: Total budgeted units of material to purchase for the quarter – 83,025 1 4. Cash Payments of Materials Purchases: Johnson Inc. purchases raw materials on account for use in production. Sheets of metal used in production cost $3.00 each. Forty percent of a month’s purchases are paid for in the month of purchase; the other 60 percent is paid for in the following month. No discount terms are available. The accounts payable balance on June 30 is $43,200. Required: Prepare a cash payment for materials purchases budget and highlight your answer for the following questions: 1. 2. 3. 4. How much cash is required for payments made on account, payable in the month of July? How much cash is required for payments made on account, payable in the month of August? How much cash is required for payments made on account, payable in the month of September? What is the expected accounts payable balance on September 30, 2017? Check Figure: Total budgeted cash payments made for materials purchases for the quarter - $239,445 5. Cash Payments for Direct Labor: Each unit produced requires 120 minutes (2.0 hours) of direct labor. Employees are paid at a rate of $7.00 per hour. Required: Prepare a cash payments for direct labor budget, showing total labor cost by month and in total for the quarter. Check Figure: Total budgeted cash payments made for direct labor for the quarter - $577,500 6. Cash Payments for Manufacturing Overhead: Variable manufacturing overhead is $2.00 per unit produced and fixed manufacturing overhead is $25,000 per month. Fixed manufacturing overhead includes $5,000 in depreciation which does not require a cash outflow. Required: Prepare a cash payments for manufacturing overhead budget, showing total manufacturing overhead cost by month and in total for the quarter. Check Figure: Total budgeted cash payments made for manufacturing overhead for the quarter $142,500 2 7. Cash Payments for Selling and Administrative (S&A) Expenses Budget: Variable selling and administrative expenses are $2.50 per unit sold and fixed selling and administrative expenses are $30,000 per month. Fixed selling and administrative expenses include $2,000 in depreciation which does not require a cash outflow. Required: Prepare a cash payments for S&A expenses budget, showing total S&A expense by month and in total for the quarter. Check Figure: Total budgeted cash payments made for S&A expenses for the quarter - $185,250 8. Cash Receipts Budget: All sales are on account. Johnson’s collection pattern is: • 50 percent collected in month of sale • 30 percent collected in month after sale • 20 percent collected in the second month after sale June sales were $350,000. Accounts receivable on June 30 is $175,000, all of which is collectible. Required: Prepare a cash receipts budget (schedule of cash receipts) and highlight your answer for the following questions: 1. 2. 3. 4. How much total cash is Johnson Inc. expecting to receive in the month of July? How much total cash is Johnson Inc. expecting to receive in the month of August? How much total cash is Johnson Inc. expecting to receive in the month of September? What is the expected accounts receivable balance on September 30, 2017? Check Figure: Total budgeted cash receipts for the quarter - $1,240,750 3 9. Comprehensive Cash Budget: Johnson Inc. – Additional Information: – – – – – – Pays a $60,000 cash dividend in August. Purchases equipment costing $65,000 in July and $50,000 in September. Has a $125,000 cash balance on June 30. Maintains a $20,000 minimum cash balance. Principal repayments occur at the end of each quarter. Pays annual interest at 10 percent when a principal payment is made. Required: Prepare a comprehensive cash budget by month and in total for the quarter. Check Figure: Ending cash balance for the quarter - $46,020 10. Budgeted Income Statement: Johnson Inc. applies manufacturing overhead on the basis of direct labor hours. Required: Prepare a budgeted income statement. Check Figures: PDOHR - $1.91 (cut off trailing decimals in your spreadsheet); Net Income - $261,505 11. Budgeted Balance Sheet Johnson Inc. reports the following account balances on September 30 prior to preparing its budgeted financial statements: Land - $10,000; Building (net) - $100,000; Common stock - $200,000; Equipment (net) - $165,000; Retained earnings - $316,835. Required: Prepare a budgeted balance sheet. Check Figure: Total Assets - $771,170 4 1. Sales Budget July August September Total July August September Total July August September Total July August September Total October Budgeted sales in units x Price per unit = Projected sales revenue 2. Production Budget Budgeted product sales in units + Desired product units in ending inventory = Total product units needed - Product units in beginning inventory = Product units to produce 3. Material Purchases Budget Units to produce x Material needed per unit = Material needed for units to produce + Desired units of material in ending inventory = Total units of material needed - Units of material in beginning inventory = Units of material to purchase 4. Cash Payments for Material Purchases Material purchases (sheets) x Cost per unit = Total cost Payables from June July purchases August purchases September purchases Total payments in month Accounts Payable 5. Cash Payments for Direct Labor July August September Total July August September Total July August September Total Units to produce x Hours per unit = Total hours required x Wage rate per hour = Direct labor cost 6. Cash Payments for Manufacturing Overhead Units to produce x Variable overhead rate = Variable overhead cost + Fixed overhead = Total manufacturing overhead cost - Deduct depreciation = Manufacturing overhead - cash 7. Cash Payments for S&A Expenses Budgeted unit sales x Variable S&A per unit = Variable S&A expense + Fixed S&A expense = Total S&A expense - Deduct depreciation = S&A expense - cash 8. Cash Receipts Budget July August September Total Budgeted sales in units x Price per unit = Projected sales revenue Receipts from June sales Accounts Receivable Receipts from July sales Receipts from August sales Receipts from September sales Total cash receipts 9. Comprehensive Cash Budget July Beginning cash balance Cash receipts Cash available Cash payments: Materials budget Labor budget Manufacturing OH budget S&A expense budget Equipment purchases Dividends Total cash payments Balance before financing Borrowing Principal repayment Interest*** Ending cash balance August September Total 10. Budgeted Income Statement Johnson Inc. Budgeted Income Statement For the Three Months Ended September 30, 2017 Sales Cost of goods sold Gross Margin Selling and admin expenses Operating income Interest expense Net income **Cost of Goods Sold (Unit Cost) Computation Production costs per unit Quantity Cost Direct materials Direct labor Manufacturing overhead (see calc below) Manufacturing OH per unit calculation From Labor and Mfg. OH Budgets Labor hours July August September Total Total manufacturing overhead for quarter Total labor hours required = Mfg. OH Total 11. Budgeted Balance Sheet Johnson Inc. Budgeted Balance Sheet September 30, 2017 Current assets: Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Property and Equipment Land Building (net of depreciation) Equipment (net of depreciation) Total property and equipment Total assets Liabilities and Equities: Accounts payable Common stock Retained earnings Total liabilities and equities
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Explanation & Answer

Here matched up answer has been provided. I think it is 100% correct. But please look at- your template has said total column for the question
2 not Quarter column. If quarter column is mentioned than ending
inventory would be 3750 units, and beginning inventory would be 3000
units. As total is mentioned I have summed up all. The template should include word quarter rather than total. Also, in question no 11- account balances on September 30 prior to preparing its budgetedfinancial statements: Land - $10,000; Building (net) - $100,000; Common stock - $200,000. This is highly contradictory. Whether it is adjusted balance or not was not clear in here. Now answer is correct. Thanks

1. Sales Budget
July
Budgeted sales in units

August
12,000

September
14,000

Total

14,500

October
40,500

15,000

x Price per unit

$

35.00

$

35.00

$

35.00

$

35.00

$

35.00

= Projected sales revenue

$

420,000

$

490,000

$

507,500

$

1,417,500

$

525,000

2. Production Budget
July
Budgeted product sales in units
+ Desired product units in ending inventory
= Total product units needed
- Product units in beginning inventory
= Product units to produce

August

September

Total

12,000

14,000

14,500

40,500

3,500

3,625

3,750

3,750

15,500

17,625

18,250

44,250

3,000

3,500

3,625

3,000

12,500

14,125

14,625

41,250

3. Material Purchases Budget
Ju...


Anonymous
Really useful study material!

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