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Chapter 9 Homework

# Chapter 9 Homework - Accounting 225 Managerial Accounting...

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Acc ! nting 225 M. Novack Accounting 225 Managerial Accounting Fall 2008 Michael Novack Homework Chapter 9

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Acc ! nting 225 M. Novack Exercise 9-1 1 July August September Total May sales: ........ \$430,000 × 10% \$43000 \$43000 June sales: \$540,000 × 70%, ....................... 10% 378000 \$54000 432000 July sales: \$600,000 × 20%, 70%, ....................... 10% 120000 420000 \$60000 600000 August sales: \$900,000 × 20%, ....................... 70% 180000 630000 810000 September sales: ........ \$500,000 × 20% 100000 100000 ..... Total cash collections \$541000 \$654000 \$790000 \$1985000 Notice that even though sales peak in August, cash collections peak in September. This occurs because the bulk of the company’s customers pay in the month following sale. The lag in collections that this creates is even more pronounced in some companies. Indeed, it is not unusual for a company to have the least cash available in the months when sales are greatest. 2. Accounts receivable at September 30: .................... From August sales: \$900,000 × 10% \$90000 From September sales: ................................ \$500,000 × (70% + 10%) 400000 ..................................... Total accounts receivable \$490000
Acc ! nting 225 M. Novack Exercise 9-3 Quarter—Year 2 Year 3 First Second Third Fourth First Required production of calculators 60000 90000 150000 100000 80000 Number of chips per calculator ×  3 ×  3 ×  3 ×  3 ×  3 Total production needs— chips 180000 270000 450000 300000 240000 Year 2 First Second Third Fourth Year .......................... Production needs—chips 180000 270000 450000 300000 1200000 ........ Add desired ending inventory—chips 54000 90000 60000 48000 48000 .................................. Total needs—chips 234000 360000 510000 348000 1248000 ............... Less beginning inventory—chips 36000 54000 90000 60000 36000 ...................... Required purchases—chips 198000 306000 420000 288000 1212000 .............. Cost of purchases at \$2 per chip \$396000 \$612000 \$840000 \$576000 \$2424000

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Acc ! nting 225 Problem 9-9 1 .............................................. September cash sales \$7400 September collections on account: .................................... July sales: \$20,000 × 18% 3600 ................................ August sales: \$30,000 × 70% 21000 .......................... September sales: \$40,000 × 10% 4000 ............................................... Total cash collections \$36000 2 Payments to suppliers: ..................... August purchases (accounts payable) \$16000 .................. September purchases: \$25,000 × 20% 5000 ................................................ Total cash payments \$21000 3 Calgon Products Cash Budget For the Month of September .................................. Cash balance, September 1 \$9000 Add cash receipts: ................................ Collections from customers 36000 ......... Total cash available before current financing 45000 Less disbursements: ................... Payments to suppliers for inventory \$21000 ................... Selling and administrative expenses 9000* ........................................ Equipment purchases 18000 .................................................. Dividends paid 3000 ............................................. Total disbursements 51000 Excess (deficiency) of cash available over .................................................. disbursements (6000) Financing: ....................................................... Borrowings 11000 ..................................................... Repayments 0 ........................................................... Interest 0 .................................................... Total financing 11000 ................................ Cash balance, September 30 \$5000
Acc ! nting 225 M. Novack Problem 9-10 1. Stokes is using the budget as a club to pressure employees and as a way to find someone to blame rather than as a legitimate planning and control tool. His

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Chapter 9 Homework - Accounting 225 Managerial Accounting...

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