GRAND CANYON ACC350 WEEK 3 Topic 3 Assignment

Please complete the following exercises and/or problems from
the textbook:

E22-24
E22-27
CP22-56
E22A-32
Prepare your answers in an Excel workbook, using one
worksheet per exercise or problem.

Save your workbook using the filename
LastnameFirstinitial.ACC350.T# where the # represents the topic number. For
example, John Doe would submit assignment #5 using the following name:
DoeJ.ACC350.T5.

You are not required to submit this assignment to
Turnitin.

E22A-32 Preparing an operating budget
Tremont, Inc. sells tire rims. Its sales budget for the nine
months ended September
30, 2014, follows:
Quarter Ended Nine-Month
Total
March 31 June 30 Sept 30 Nine Mth Total
Cash sales, 20% $24,000 $34,000 $29,000 $87,000
Credit sales, 80% 96,000 136,000 116,000 348,000
Total sales $120,000 $170,000 $145,000 $435,000
In the past, cost of goods sold has been 40% of total sales.
The director of marketing
and the financial vice president agree that each quarter’s
ending inventory
should not be below $20,000 plus 10% of cost of goods sold
for the following
quarter. The marketing director expects sales of $220,000
during the fourth quarter.
The January 1 inventory was $32,000. Prepare an inventory,
purchases, and cost of
goods sold budget for each of the first three quarters of
the year. Compute cost of

E22-24 Preparing an operating budget
Sales Budget
Dunbar Company manufactures drinking glasses. One unit is a
package of 8 glasses,
which sells for $20. Dunbar projects sales for April will be
3,000 packages, with
sales increasing by 100 packages per month for May, June,
and July. On April 1,
Dunbar has 250 packages on hand but desires to maintain an
ending inventory of
10% of the next month’s sales. Prepare a sales budget and a
production budget for
Dunbar for April, May, and June.
May pkg. produced 3,110

E22-27 Preparing a financial budget
Cramer Company projects the following sales for the first
three months of the
year: $12,500 in January; $13,240 in February; and $14,600
in March. The
company expects 70% of the sales to be cash and the
remainder on account. Sales
on account are collected 50% in the month of the sale and
50% in the following
month. The Accounts Receivable account has a zero balance on
January 1. Round
to the nearest dollar.
Requirements
1. Prepare a schedule of cash receipts for Cramer for
January, February, and
March. What is the balance in Accounts Receivable on March
31?
2. Prepare a revised schedule of cash receipts if receipts
from sales on account
are 60% in the month of the sale, 30% in the month following
the sale, and
10% in the second month following the sale. What is the
balance in Accounts
Receivable on March 31?

P22-56 Preparing a financial budget
This problem continues the Davis Consulting, Inc. situation
from Problem P21-63 of
Chapter 21. Assume Davis Consulting began January with
$29,000 cash. Management
forecasts that cash receipts from credit customers will be
$49,000 in January and
$51,500 in February. Projected cash payments include
equipment purchases ($17,000
in January and $40,000 in February) and selling and
administrative expenses ($6,000
each month).
Davis’s bank requires a $20,000 minimum balance in the
firm’s checking account.
At the end of any month when the account balance falls below
$20,000,
the bank automatically extends credit to the firm in
multiples of $5,000. Davis
borrows as little as possible and pays back loans each month
in $1,000 increments,
plus 5% interest on the entire unpaid principal. The first
payment occurs one
month after the loan.
Requirements
1. Prepare Davis Consulting’s cash budget for January and
February 2013.
2. How much cash will Davis borrow in February if cash
receipts from customers
that month total $21,500 instead of $51,500?