BMAL 530 Homework 4

Description

Question 1

 

Ruiz Co. provides the following sales forecast for the next four months.

 

The company wants to end each month with ending finished goods inventory equal to 20% of next month’s forecasted sales. Finished goods inventory on April 1 is 124 units.

 

Prepare a production budget for the months of April, May, and June.

 

Question 2

 

Zira Co. reports the following production budget for the next four months.

 

Each finished unit requires four pounds of raw materials and the company wants to end each month with raw materials inventory equal to 30% of next month’s production needs. Beginning raw materials inventory for April was 773 pounds. Assume direct materials cost $5 per pound.

 

Prepare a direct materials budget for April, May, and June. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)

 

Question 3

 

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year.

 

According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1.

 

Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.)

 

Question 4

 

Jasper Company has sales on account and for cash. Specifically, 64% of its sales are on account and 36% are for cash. Credit sales are collected in full in the month following the sale. The company forecasts sales of $526,000 for April, $536,000 for May, and $561,000 for June. The beginning balance of Accounts Receivable is $307,000 on April 1.

 

Prepare a schedule of budgeted cash receipts for April, May, and June.

 

Question 5

 

Zisk Co. purchases raw materials on account. Budgeted purchase amounts are April, $91,000; May, $121,000; and June, $131,000. Payments are made as follows: 70% in the month of purchase and 30% in the month after purchase. The March 31 balance of accounts payable is $33,000.

 

Prepare a schedule of budgeted cash receipts for April, May, and June.

 

Question 6

 

Karim Corp. requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,800, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.

 

Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)

 

Question 7

 

Prepare a cash budget for October, November, and December.