LEARNING ACTIVITIES

Concept Mapping:

Creatively draw a paradigm that maps the concepts on:

1.Company Budgeting

2.Preparation of the master budget

V.ASSESSMENT

Show all computations in good form.

1.

Sales of SciFi Corp are expected to be 6,000 units for the month. The company would like to maintain 15% of unit sales for each month in ending inventory. The beginning inventory is 1,200 units. How many units should the company produce for the coming month?

2.

Meridian Company has a beginning inventory of 28,000 units. They intend to sell 100,000 units for the current month, and they wish to reduce ending inventory to 40% of the beginning inventory. How many units should the company produce?

3.Callgate Company has forecast credit sales for the fourth quarter of the year:

September (actual)P100,000.00 Fourth quarter:

October80,000.00

November70,000.00

December120,000.00

Based on past experience, 20% of sales are collected in the month of sales, 70% in the following month, and 10% are never collected. Have a schedule of cash receipts for the company covering the last quarter of the year.

4. Narda Corporation's actual sales and purchases for April are shown here, along with forecasted sales and purchases for June through September.

SalesPurchases

April (actual)P640,000.00P260,000.00

May (Actual)600,000.00240,000.00

June (forecast)550,000.00240,000.00

July (forecast)550,000.00360,000.00

August (forecast)580,000.00400,000.00

September (forecast)660,000.00340,000.00

The company makes 10% of its sales on cash and 90% on credit. Of the sales, 20% are collected in the month after the sale, and 80% are collected months after. The company pays 40% of its purchases in the month after purchase and 60% two months after.

Labor expense equals 10% of the current month's sales. Overhead expense equals P24,000/month. Interest payments of P60,000 are due in June and September. A cash dividend of P100,000 is scheduled to be paid in June. Taxes of P50,000 are due in June and September. There is a scheduled capital outlay of P600,000 in September.

The company's ending cash balance in May is P40,000. The minimum desired cash balance is P30,000.

Have a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget with borrowing and repayments for June September. The maximum desired cash balance is P 100,000. Excess cash (above P100,000.00) is used to buy Trading Securities. Trading securities are sold prior to borrowing funds in case of a cash shortfall (less than P30,000).