BM1915

NAME: CABRIA, JERREL NICOLETTE T. DATE: 11-10-2024 SCORE:

QUIZ

PROBLEM SOLVING (15 items x 5 points)

Answer the following items on the space provided. Show your computations.

ABC Company seeks your assistance to develop cash and other budget information for August,
September, and October, 201A. At July 31, 201A, the company had cash of P22,000, accounts
receivable of P874,000, inventories of P618,800, and accounts payable of P266,110.

The budget is based on the following assumptions:

a. Sales
1. Sixty percent (60%) of the billings are collected within the month of sale, 25% are
collected in the first month after the month of sale, 10% are collected in the second
month after the month of sale, and 5% are proved uncollectible.
b. Purchases
1. Sixty-five percent (65%) of all purchases of materials and selling and administrative
expenses are paid in the month purchased and the remainder in the following month.
2. Each month’s units of ending inventory is equal to 120% of the next month’s units of
sales.
3. The cost of each unit of inventory is P20.00.
4. Selling and administrative expenses are equal to 20% of the current month’s sales.

Actual and projected sales are as follows:

Month In pesos In units
June P708,00 23,600
0
July 726,000 24,200
August 714,000 23,800
Septemb 684,000 22,800
er
October 720,000 24,000
Novembe 732,000 24,400
r

Required (15 items x 5 points):

Prepare cash budget for August, September and October, 201A, based on the above data and
supported by the following schedules:
a. Cash receipts from accounts receivable (4 items
Answer:
August September October
June (₱708,000 × 10%) ₱ 70,800.00
July
₱726,000 × 60% 435,600.00
₱726,000 × 25% 181,500.00
₱726,000 × 10% ₱ 72,600.00
August
₱714,000 × 60% 428,400.00
₱714,000 × 25% 178,500.00
₱714,000 × 10% ₱ 71,400.00
September
₱684,000 × 60% 410,400.00
₱684,000 × 25% 171,000.00
Total ₱ 687,900.00 ₱ 679,500.00 ₱ 652,800.00
b. Purchases of inventory
Answer:
August September October

Expected sales in units 23,800 22,800 24,000

Desired ending inventory 28,560 27,360 28,800

Total 52,360 50,160 52,800

Expected beginning inventory 29,040 28,560 27,360

Purchases in units 23,320 21,600 25,440

Unit cost ₱ 20.00 ₱ 20.00 ₱ 20.00
Total purchase cost ₱ 466,400.00 ₱ 432,000.00 ₱ 508,800.00

c. Cash disbursements on accounts payable

Answer:
August September October
July (₱498,400 × 35%) ₱ 174,440.00
August
₱466,400 × 65% 303,160.00
₱466,400 × 35% ₱ 163,240.00
September
₱432,000 × 65% 280,800.00
₱432,000 × 35% ₱ 151,200.00
October (₱508,800 × 65%) 330,200.00
Total ₱ 477,600.00 ₱ 444,040.00 ₱ 481,400.00

d. Cash disbursements on selling and administrative expenses

Answer:
August September October
July (₱726,000 × 20% ×
₱ 50,820.00
35%)
August
₱714,000 × 15% × 65% 69,615.00
₱714,000 × 15% × 35% ₱ 37,485.00
September
₱684,000 × 15% × 65% 66,690.00
₱684,000 × 15% × 35% ₱ 35,910.00
October (₱720,000 × 15% ×
70,200.00
65%)
Total ₱ 120,435.00 ₱ 104,175.00 ₱ 106,110.00
e. Cash budget
Answer:
August September October
Beginning cash balance ₱ 22,000.00 ₱ 111,865.00 ₱ 243,150.00
Cash receipts 687,900.00 679,500.00 652,800
Total cash available ₱ 709,900.00 ₱ 791,365.00 ₱ 895,950.00
Disbursements:
Cash disbursements 477,600.00 444,040.00 481,400.00
Selling and Administrative
Expenses 120,435.00 104,175.00 106,110.00
Total cash needed 598,035.00 548,215.00 587,510
Ending cash balance ₱ 111,865.00 ₱ 243,150.00 308,440

Rubric for problem solving:

Performance Indicators Points
Correct accounts and amounts used 3
Computed final amounts are 2
correct/balanced
Total 5

08 Quiz 1 *Property of STI

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