chapter 9 solutions

chapter 9 solutions - CHAPTER 9 Profit Planning and...

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Unformatted text preview: CHAPTER 9 Profit Planning and Activity-Based Budgeting 9-33 (30 MINUTES) 1. Schedule of cash collections: January February March Collection of accounts receivable: $165,000 x 20% ......................................... $ 33,000 Collection of January sales ($450,000): 60% in January; 35% in February ........... 270,000 $157,500 Collection of February sales ($540,000): 60% in February; 35% in March .............. 324,000 $189,000 Collection of March sales ($555,000): 60% in March ............................................ 333,000 Sale of equipment .......................................... _______ _______ 15,000 Total cash collections .............................. $303,000 $481,500 $537,000 2. Schedule of cash disbursements: January February March Payment of accounts payable ...................... $ 66,000 Payment of January purchases ($270,000): 70% in January; 30% in February ........... 189,000 $ 81,000 Payment of February purchases ($300,000): 70% in February; 30% in March .............. 210,000 $ 90,000 Payment of March purchases ($420,000): 70% in March ............................................ 294,000 Cash operating costs .................................... 93,000 72,000 135,000 Total cash disbursements ....................... $348,000 $363,000 $519,000 9-33 (CONTINUED) 3. Schedule of cash needs: January February March Beginning cash balance. $ 60,000 $ 60,000 $132,900 Total receipts. 303,000 481,500 537,000 Subtotal. 363,000 541,500 669,900 Less: Total disbursements 348,000 363,000 519,000 Cash excess (deficiency) before financing 15,000 178,500 150,900 Financing: Borrowing to maintain $60,000 balance.. 45,000 -0- Loan principal repaid (45,000) -0- Loan interest paid.. ________ (600) * __-0-__ Ending cash balance $ 60,000 $132,900 $150,900 * $45,000 x 8% x 2/12 9-39 (45 MINUTES) 1. The revised operating budget for Vancouver Consulting Associates for the fourth quarter is presented below. Supporting calculations follow: V ANCOUVER C ONSULTING A SSOCIATES R EVISED O PERATING B UDGET F OR THE F OURTH Q UARTER OF 20 X 4 Revenue: Consulting fees: Computer system consulting .......................................................... $ 956,250 Management consulting .................................................................. 936,000 Total consulting fees ................................................................ 1,892,250 Other revenue ........................................................................................... 20,000 Total revenue .................................................................................... 1,912,250 Expenses: Consultant salary expenses* .................................................................. 1,021,300 Travel and related expenses ................................................................... Travel and related expenses ....
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chapter 9 solutions - CHAPTER 9 Profit Planning and...

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