亨格瑞管理會計英文第15版練習答案07

1、CHAPTER 7COVERAGE OF LEARNING OBJECTIVESLEARNING OBJECTIVEFUNDAMENTALASSIGNMENTMATERIALCRITICALTHINKINGEXERCISESANDEXERCISESPROBLEMSCASES,EXCEL, COLLAB. & INTERNET EXERCISESLO1: Explai n how budgets facilitate pla nning and coordi nati on.A1,B1LO2: An ticipate possible huma n relatio ns problems cau

2、sed by budgets.2540LO3: Explai n pote ntially dysf unctional incen tives in the budget process.2239, 40LO4: Explai n the difficulties of sales forecasti ng.234249LO5: Explain the major features and adva ntages of a master budget.A1,B124,2639LO6: Follow the prin cipal steps in prepari ng a master bud

3、get.A1,B1294043,45L07: Prepare the operat ing budget and the support ing schedules.A1,B128,29,30,314043,45,46,48LO8: Prepare the finan cial budget.A1,B127,29,32,33,34,3536,37,3843,44,47,48LO9: Use a spreadsheet to develop a budget (Appe ndix 7).41,42CHAPTER 7In troducti on to Budgets and Prepari ng

4、the Master Budget7-A1 (60-90 mi n.)1.Exhibit IRAPIDBUY ELECTRONICS, INC.Mall of America StoreBudgeted In come Stateme ntFor the Three Mon ths En di ng August 31,20X8Cost of goods sold (.62x $300,000)186,000Gross profit$114,000Operati ng expe nses:Salaries, wages, commissi ons$60,000Other expe nses12

5、,000Depreciati on1,500Rent, taxes and other fixed expe nses33,000106,500In come from operati ons.$7,500In terest expe nse*1,338Net in come$ 6,162Sales$300,000See schedule g for calculation of interest.Exhibit IIRAPIDBUY ELECTRONICS, INC.Mall of America StoreCash BudgetFor the Three Mon ths En di ng

6、August 31,20X8JuneJulyAugustBeg inning cash bala nee$ 5,800$5,600$ 5,079Minimum cash bala nee desired5,0005,0005,000(a) Available cash bala nee$ 800$ 600$79Cash receipts & disburseme nts:Collecti ons from customers(schedule b)$ 75,200$121,400$ 90,800Payme nts for mercha ndise(schedule d)(86,800)(49,

7、600)(49,600)Fixtures (purchased in May)(11,000)-Payme nts for operati ngexpe nses (schedule f)(44,600)(30,200)(30,200)(b) Net cash receipts & disburseme nts$(67,200)$ 41,600$ 11,000Excess (deficie ncy) of cash beforefinancing (a + b)(66,400)42,20011,079Financing:Borrow ing, at beg inning of period$

8、67,000$ -$ -Repayme nt, at end of period-(41,000)(10,000)In terest, 10% per annum-(1,121)*(217)*(c) Total cash in crease (decrease)from financing$ 67,000$(42,121)$(10,217)(d) Ending cash bala nee (begi nningbala nee + b + c)$ 5,600$ 5,079$ 5,862See schedule gExhibit IIIRAPIDBUY ELECTRONICS, INC.Mall

9、 of America StoreBudgeted Bala nee SheetAugust 31,20X8AssetsLiabilities and OwnersEquityCash (Exhibit II)$5,862Aeeo unts payable$ 37,200Aeeo unts receivable*86,400Notes payable16,000*Mereha ndise inven tory37,200Total eurre nt liabilities$ 53,200Total eurre nt assets$129,462Net fixed assets:Own ers

10、equity:$33,600 less$102,200 plus netdepreeiation of $1,50032,100in eome of $6,162108,362Total assets$161,562Total equities$161,562*July sales, 20%x 90% x$80,000$ 14,400August sales, 100%x 90%x $80,0002,000Aeeo unts reeeivable$86,400* See sehedule gJuneJulyAugustTotalSehedule a: Sales BudgetCredit sa

11、les (90%)$126,000$72,000$72,000$270,000Cash sales (10%)14,0008,0008,00030,000Total sales (to Exhibit I)$140,000$80,000$80,000$300,000Sehedule b: Cash Colleetio nsJuneJulyAugustCash sales$14,000$ 8,000$ 8,000Schedule c: Purchases BudgetMayJuneJulyAugustDesired purchases:62% x next months sales$86,800

12、$49,600$49,600$37,200Schedule d: Disburseme nts for PurchasesJuneJulyAugustLast mon ths purchases (to Exhibit II)$86,800$49,600$49,600On acco unts receivable from:April salesMay salesJune salesJuly salesTotal collections (to Exhibit II)10,80050,40012,600100,800$75,200$121,40025,20057,600$90,800Other

13、 required items related to purchasesAccou nts payable, August 31,2008$37,200(62% x September sales- to Exhibit III)Cost of goods sold (to Exhibit I)$86,800$49,600$49,600Schedule e: Operati ng Expe nse BudgetJuneJulyAugustTotalSalaries, wages, commissi ons$28,000$16,000$16,000$60,000Other Variable ex

14、pe nses5,6003,2003,20012,000Fixed expe nses11,00011,00011,00033,000Depreciatio n5005005001,500Total operati ng expe nses$45,100$30,700$30,700$106,500Schedule f: Payme nts for Operati ng Expe nsesJuneJulyAugustVariable expe nses$33,600$19,200$19,200Fixed expe nses11,00011,00011,000Total payme nts for

15、 operat ing expe nses$44,600$30,200$30,200Schedule g: In terest calculatio nsJuneJulyAugustBeg inning bala nee$67,000$67,558$26,000Mon thly in terest expe nse 10%558563217Ending bala nee before repayme nt$67,55868,12126,217Prin cipal repayme nt (fromstateme nt of receipts and disburseme nts)(41,000)

16、(10,000)In terest payme nt(1,121)(217)Ending bala nee$26,000$16,0002. This is an example of the classic short-term, self-liquidating loan. The n eed for such a loa n ofte n arises because of the seas onal n ature of a bus in ess. The basic source of cash is proceeds from sales to customers. In times

17、 of peak sales, there is a lag between the sale and the collection of the cash, yet the payroll and suppliers must be paid in cash right away. When the cash is collected, it in turn may be used to repay the loan. The amount of the loa n and the tim ing of the repayme nt are heavily depe ndent on the

18、 credit terms that perta in to both the purchas ing and sell ing fun cti ons of the bus in ess.7-B1(60-120 min.) $ refers to Australia n dollars.1. See Exhibits I, II, and III and supporting schedules a, b, c, d.DecemberJanuaryFebruary$156,200$ 24,000*$ 24,00050,000124,000140,000$206,200$148,000$164

19、,00064,000156,20032,200$142,200$ -$131,800March$ 24,00076,000$100,00024,000$ 76,0002. The cash budget and bala nee sheet clearly show the ben efits of moving to just-in-time purchasing (though the transition would rarely be accomplished as easily as this example suggests). However, the company would

20、 be no better off if it left much of its capital tied up in cash - it has merely substituted one asset for another. At a minimum, the excess cash should be in an in terest beari ng acco unt - the in terest earned or forgone is one of the costs of inven tory.Schedule a: Sales BudgetJanuaryFebruaryMar

21、chTotal sales (100% on credit)$248,000$280,000$152,000Schedule b: Cash Collectio ns60% of curre nt mon ths sales$148,800$168,000$91,20030% of previous mon ths sales30,00074,40084,00010% of sec ond previous mon ths sales10,00010,00024,800Total collect ions$188,800$252,400$200,000Schedule c: Purchases

22、 Budget Desired ending inven toryCost of goods soldTotal n eededBeg inning inven toryPurchases* Actual ending January (and begi nning February) inven tory level is $32,200, as inven tory levels are draw n dow n toward desired level of $24,000.Schedule d: Disburseme nts for Purchases100% of previous

23、mon ths purchasesMarch 31 acco unts payable$142,200$-$131,800$76,000Exhibit IWALLABY KITECash BudgetFor the Three Mon ths En di ng March 31,20X2JanuaryFebruaryMarchCash bala nee, beg inning$ 20,000$ 20,400$138,767Minimum eash bala nee desired20,00020,00020,000(a) Available eash balanee0400118,767Cas

24、h reeeipts and disburseme nts:Colleetio ns from eustomers(Sehedule b)188,800252,400200,000Payme nts for mereha ndise(Sehedule d)(142,200)-(131,800)Re nt(32,200)(1,000)(1,000)Wages and salaries(60,000)(60,000)(60,000)Miseella neous expe nses(10,000)(10,000)(10,000)Divide nds(6,000)-Purehase of fixtur

25、es(12,000)(b) Net eash reeeipts & disbursements$ (61,600)$181,400$ (14,800)Exeess (defieie ncy) of eashbefore financing (a + b)$ (61,600)$181,800$103,967Financing:Borrow ing, at beg inning of period$ 62,000$ -$ -Repayme nt, at end of period-(62,000)Simple in terest, 10% mon thly(1,033)(e) Total cash

26、 in crease (decrease)from financing$ 62,000$ (63,033)$ -(d) Cash balanee, end (beginningbala nee + e + b)$ 20,400$138,767$123,967Exhibit IIWALLABY KITEBudgeted In come Stateme ntFor the Three Mon ths En di ng March 31,20X2Sales (Schedule a)$680,000Cost of goods sold (Schedule c)340,000Gross margin$3

27、40,000Operati ng expe nses:Rent*$ 67,000Wages and salaries180,000Depreciati on.3,000In sura nee1,500Miscella neous30,000281,500Net in come from operati ons$ 58,500In terest expe nse1,033Net in come$ 57,467*(January-March sales less $4 0,000)x .10 plus 3x $1,000Exhibit 山WALLABY KITEBudgeted Bala nee

28、SheetMarch 31,20X2AssetsCurre nt assets:Cash (Exhibit I)$123,967Acco unts receivable*88,800Mercha ndise inven tory (Schedule c)24,000Un expired in sura nee4,500$241,267Fixed assets, net: $50,000 + $12,000 - $3,00059,000Total assets$300,267Liabilities and Stockholders EquityLiabilities:Acco unts paya

29、ble (Schedule d)$76,000Rent payable.64,000Divide nds payable6,000$146,000Stockholders equity*154,267Total liabilities and stockholders equity.$300,267$8*February sales (.10x $280,000) plus March sales (.40x $152,000)*Bala nee, December 31,20X1$102,800Add: Net in come57,467Total$160,267Less: Divide n

30、ds paid6,000Bala nee, March 31,20X2$154,2677-1 Budgeti ng 1) provides an opport unity for man agers to reevaluate existing activities and evaluate possible new activities, 2) compels managers to think ahead by formaliz ing their resp on sibilities for pla nning, 3) aids man agers in com muni cati ng

31、 objectives to un its and coordi nat ing acti ons across the orga ni zati on, and 4) provides ben chmarks to evaluate subseque nt performa nee.7-2 Budget ing is primarily atte nti on direct ing because it helps man agers to focus on operat ing or finan cial problems early eno ugh for effective pla n

32、ning or acti on.7-3 Strategic planning covers no specific time period, is quite general, and ofte n is not built around finan cial stateme nts. Lon g-ra nge pla nning usually has a 5- or 10-year horizon and consists of financial statements without much detail. Budget ing usually has a horiz on of on

33、e year or less, and con sists of finan cial stateme nts with much detail.7-4Con ti nu ous budgets add a month (or quarter) in the future as themonth (or quarter) just en ded is dropped. Therefore, the con ti nu ous budget provides a con ti nu ally updated budget look ing twelve mon ths ahead. Whe n

34、the new month (or quarter) is added, the budget for the rema in der of the curre nt year may also be revised. When compa nies revise the budgets for the rema in der of the curre nt year, they usually compare subseque nt results to the original budget (a fixed target) in addition to comparing them to

35、 the latest revised budget.7-5 If the measures used to reward employees in the performa nee evaluation system are not aligned with the goals of the company, the incen tives from the evaluatio n system may lead employees to take actions that con flict with the in terests of the compa ny.7-6 Lower-lev

36、el man agers bias their forecasts to create budgetary slack or paddi ng. Upper-level man agers adjust for this bias in creati ng a revised budget. Therefore, lower-level man agers in troduce additi onal bias to compe nsate for the adjustme nt that will be made by upper-level man agers, and upper-lev

37、el man agers in troduce additi onal adjustme nts for the additi onal bias. This cycle can quickly destroy the pote ntial ben efits of budgets.7-7 A man ager may make short-r un decisi ons to in crease profits that are not in the company s best lemgp interests, such as offering customers excessively

38、favorable credit terms or cutti ng discreti onary expe nditures such as R&D and advertising, trading future sales for current profits. In the extreme, the man ager might choose to falsely report in flated profits.7-8 First, by movi ng this years sales into n ext year or movi ng n ext years expenses

39、into this year, the manager ensures a higher level of reported profit (and probably a higher bonus) n ext year. Second, by decreas ing this years in come, the man ager avoids ratchet ing up of performa nee expectatio ns in setting the bonus target for the next year.7-9 Budgeted performa nee is bette

40、r tha n past performa nee as a basis for judgi ng curre nt performa nee because the budget contains no hidde n in efficie ncies and can be foun ded on curre nt rather tha n past econo mic con diti ons.7-10 Budgets are especially importa nt in en vir onments that are rapidly cha nging. They force man

41、 agers to look forward and pla n for cha nge. Budgets force an alysis of the factors that are bringing about the cha nges.7-11 No. When budgeting in done correctly, it is an important aid to man agers. Man agers n eed time to pla n and coord in ate their various activities. Budget ing forces them to

42、 take time from the day-to-day problems and focus on Ion ger-term issues.7-12 The sales forecast is the starti ng point for budget ing because all other operati ng activities of the compa ny are affected by the volume of sales.7-13 The sales forecast is in flue need by past patter ns of sales, estim

43、ates made by the sales force, gen eral econo mic con diti ons, competitors acti ons, cha nges in prices, market research studies, and advertis ing and sales promoti on pla ns.7-14 An operat ing budget is used as a guide for producti on and sales and it focuses on the in come stateme nt. A finan cial

44、 budget is used to con trol the receipt and disburseme nt of funds and it focuses on the stateme nt of cash receipts and disburseme nts.7-15 Operat ing expe nses are costs charged to the in come stateme nt in a particular period. Some operati ng expe nses may be associated with the sales of the peri

45、od, and others may be costs of being in bus in ess for the period. Disburseme nts for these operati ng expe nses, that is, the cash payme nts for them, may come in a previous period (assets purchased in one period and depreciated over future periods) or a future period (wages accrued in a period but

46、 paid in the n ext period), as well as duri ng the period.7-16 A cash budget is an attempt to mon itor and regulate the flow of cash in optimum fashi on.7-17Budget ing will be effective only if it is accepted by those man agerswho are resp on sible for con troll ing costs. Since their performa nee w

47、ill be measured aga inst the budget, they must be educated in the assumpti ons un derly ing the budget and convin ced of its objectivity and releva nee.7-18 Both fun cti onal and activity-based master budgets begi n with the forecasted dema nd for products or services. However, whereas fun cti onal

48、budgets the n determ ine the inven tory, materials, labor, and overhead budgets, the activity-based budget focuses on determ ining the dema nd for key activities. This dema nd is measured by the cost-driver unit for each activity. Then the budgeted resource con sumpti on rates are used to set the bu

49、dgets for resources such as materials, labor, and overhead. The focus on activities and con sumptio n rates in activity-based budgeti ng is what man agers believe offers value from an operati onal con trol perspective.7-19 No. Finan cial pla nning models are mathematical stateme nts of the relations

50、hips in the organization among all the operating and financial activities and of other major in ternal and exter nal factors that may affect the financial results of decisions. But financial planning models are only as good as the assumpti ons and in puts used to build them. Man agers must un dersta

51、 nd the models to provide appropriate assumpti ons and in puts. If managers do not understand budgeting, using financial planning models can result in GIGO (garbage in, garbage out).7-20 Sett ing up the master budget on a spreadsheet is time-c onsuming -the first time. However, if it is done properl

52、y, with maximum flexibility, then the ease of subseque nt use probably will more tha n offset that in itial cost. Ultimately, though, the master budget system must meet the cost-be nefit test. Improved budgeti ng systems are only worthwhile if they offer net ben efits. Prepari ng and revis ing the m

53、aster budget of a large compa ny just would not be feasible without the aid of a computer.7-21 Spreadsheets can be used to make a mathematical model of an organization. It may take much effort to create the model, but once it is in place it can be used over and over again with minimal effort. Such a

54、 model is especially useful for sen sitivity an alysis, which is the ask ing of what if questi ons.7-22 Budgets that are used primarily for limit ing spe nding provideincentives for“ game playing.” Accurate forecasts and estimates give way tostrategies desig ned to avoid budget cuts or to justify in

55、 creased budgets.Budgets should have a much larger role in the effective and efficie nt management of an organization. A budget should be a decision tool. It helps man agers project the results of their decisi ons, thereby aidi ng them in making the right decisions. It also provides a base for adapting to change.Any thi ng that results in loss of budget accuracy