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Chapter+12+-+2009

# Chapter+12+-+2009 - EXERCISE SOLUTIONS Exercise 12.9...

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EXERCISE SOLUTIONS Exercise 12.9 Budgeted cash receipts from sales HARRY’S HARDWARE LTD Budgeted Cash Receipts from Sales April May June From cash sales in same month [1] \$37 500 \$45 000 \$39 000 [30% x current month] From credit sales same month 52 500 63 000 54 600 [70% x current month x 60%) From preceding month’s sales [3] 29 190 26 250 31 500 [70% x 30% x preceding month] From second preceding month [4] 5 670 4 865 4 375 [70% x 5% x second preceding month] \$124 860 \$139 115 \$129 475 [1] 30% of monthly sales are for cash. [2] 70% of monthly sales are for credit. 60% of monthly credit sales are collected in month of sale. [3] 30% of monthly credit sales are collected in the next month. [4] 5% of monthly credit sales are collected two months later.

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Exercise 12.10 Budgeted cash payments for purchases A. LEWISHAM LTD Budgeted Purchases – Sept.-Oct. 2006 Sept. Oct. Required ending inventory \$171 600 [1] \$188 160 [3] Cost of sales 129 600 [2] 116 400 [4] Less beginning inventory (190 500) (171 600) [5] Required purchases \$110 700 \$132 960 B. LEWISHAM LTD Expected Cash Payments for Purchases – Sept.-Oct. 2006 Sept. Oct. 60% - current month 66 420 [8] 79 776 [11] 30% - previous month 41 400 [7] 33 210 [10] 10% - second preceding month \$12 950 [6] \$13 800 [9] Cash payments \$120 770 \$126 786 [1] 194 000 (0.60) + 0.4 [230 000 (0.60)] [2] 216 000 (0.60) [3] 230 000 (0.60) + 0.4 [209 000 (0.60)] [4] 194 000 (0.60) [5] Ending inventory – September [6] 129 500 x 0.10 [7] 138 000 x 0.30 [8] 110 700 x 0.60 [9] 138 000 x 0.10 [10] 110 700 x 0.30 [11] 132 960 x 0.60 2
Problem 12.2 Bank reconciliation A. Cash Receipts Journal Cash Payments Journal Date Particulars Cash at Bank Date Particulars Cash at Bank Jun 30 Progress, total \$22 898 Jun 30 Progress, total \$24 576 So-Lite Ltd Bank fees 32 (dishon. cheque) (327) Adj. to Chq. 842 Error 9 Electronic transfer 680 Interest revenue 54 \$23 305 \$24 617 B. Cash at Bank 1/6 Balance b./d \$6 300 30/6 CPJ \$24 617 30/6 CRJ 23 305 Balance c/d 4 988 \$29 605 \$29 605 30/6 Balance b/d \$4 988 3

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C. COLIN’S CHARTER TOURS Bank Reconciliation Statement as at 30 June Balance as per bank statement Cr \$4 033 Add: Outstanding deposit 1 200 \$5 233 Less: Unpresented cheques: no. 864 \$60 no. 866 73 no. 870 111 245 Balance as per Cash at Bank account Dr \$4 988 D. Cash at bank \$4 988 4
Problem 12.3 Bank reconciliation A Cash journals: Before adjustments Adjustments Final Totals Receipts: \$14 538.18 + 1 250 Note credited - \$268 ret. \$15 520.18 Payments: \$14 800.62 + \$9 Error adj. + \$32.00 fees \$14 841.62 Cash at Bank 1/5 Balance b./d \$16 998.54 31/5 CPJ \$14 841.62 31/5 CRJ 15 520.18 Balance c/d 17 677.10 \$32 518.72 \$32 518.72 1/6 Balance b/d \$17 677.10 B. AZURE SERVICES LTD Bank Reconciliation Statement as at 31 May Balance as per bank statement Cr \$17 995.105 Add: Outstanding deposit 1 285.80 \$19 240.90 Less: Unpresented cheques: no. 326 \$813 no. 342 402.80 no. 345 348.00 1 563.80 Balance as per Cash at Bank account \$17 677.10 5

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Problem 12.4 Bank reconciliation A.
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