Name
Tutor
Course
Date
Accounting
Doha Trading Company
Cash Collection on Credit Sales

  June July August
Credit Sales 150,000 200,000 80,000
Collection 1 90,000(June) 120,000 (July) 48,000 (Aug)
Collection 2   60,000 (June) 80,000(July)
Total Collection 90000 180000 128000

 
Cash Disbursement for Purchase Inventory

  June July August
Purchases 20,000 190,000 177,000
Payment 1 6000(June) 57000(July) 53100(Aug)
Payment 2   14000(June) 133000(Jul)
Total Payment 6000 71000 186100

 
 
 
 
Cash Budget

Doha Company
Cash Budget
  July August
Beginning Cash Balance 90,000 85,000
Add Cash Collections    
Cash Sales 120,000 300000
Credit sales collection (July) 120,000 48000
Credit sales (June) 60,000 80000
     
Total Cash Available 390,000 513000
     
Less: Cash Disbursements    
Credit Purchases (July)(Aug) 57000 53100
Credit purchase (June)(Jul) 14000 133000
Other Expenses    
Administration 108000 42500
Staff salaries 126000  
Land   100,000
Total Expenses 305000 328600
Excess Cash 85000 184,400
     
Financing 0  
     
Ending Cash Balance 85000 184,400
     

 
Saudi Trading Company
Cash Collection on Credit Sales

  April May June
Credit Sales 167,475 379,610 334,950
Collection 1 33495 75922 (May) 66990 (June)
Collection 2   130630.5(April) 296095.8 (May)
Total Collection 33495 206552.5 363085.8

 
 
Cash Disbursement for Purchase Inventory

  April May June
Purchases 288,000 247500 99000
Payment 1 172800 (April) 148500 (May) 59400 (June)
Payment 2   115200(April) 99000 (May)
Total Payment 172800 263700 158400

 
 
 
Cash Budget

Saudi Trading Company
Cash Budget
  May June
Beginning Cash Balance 65,000 60000
Add Cash Collections    
Cash Sales 195,000 231,000
Credit sales collection  1 75922 66990
Credit sales 2 130630.5 296095.8
     
Total Cash Available 466552.5 654085.8
     
Less: Cash Disbursements    
Credit Purchases (July) 148500 59400
Credit purchase (June) 115200 99000
Other Expenses    
Employees’ Salaries 60000 60000
Equipment   100000
Selling Expense 40000 128000
Rent Expenses 190000  
Total Expense 553700 446400
Excess/ Deficit Cash -87147.5 207685.8
     
Financing Required    
Borrowing 147,387.5  
Repayments   147387.5
Interest 240 240
     
Total Financing 147,147.5 (147627.5)
     
Ending Cash Balance 60000 60058.3

 
Problem 2

  1. Contribution Margin
  2. Gross Margin

Solution
Selling cost (23+25)= 48
Contribution Margin= [(Sales- Variable Costs)/Net Sales]
Total Sales= 48*10,000= 480,000
Variable costs= 15* 10,000= 150,000
(Selling) Cost of goods sold per unit= 10*10,000= 100,000
Contribution Margin
480,000-150,000-100,000= 230,000
Gross Contribution margin= {[Sales- (Cost of a good- Selling and Admin cost)]/sales}
480,000-15,000-150,000= 315,000
Gross Margin= 33* 10,000= 330,000
Problem 3
Saudi Shipping Expense
Cost of 10,000 pounds= (27500-20,000= 7500)
5,000 pounds= 3750
2,500 pounds= 20,000+ 3750= 23,750
Note: Marginal cost is used since all volumes have a fixed cost.
Problem 4
A Contribution Margin
Contribution Margin= [(Sales- Variable Costs)/Net Sales]
Contribution margin= 1,400,000-(60,000+ 140,000+ 640,000)= 560,000
560,000/1400,000= 40%
Gross Contribution Margin
Gross Contribution margin= {[Sales- (Cost of a good- Selling and Admin cost)]/sales}
Gross contribution margin= 1400, 000- 640,000-220,000-100,000= 440,000
440/1400= 31.4286%
Net Income in First Quarter
Net income= Sales- Total Cost
1400, 000- 640,000-220,000-100,000- 60,000- 140,000= 240,000
 
Saudi Furniture

  1. Direct material= Fabric used in upholster+ Lumber used to build+ Wages assembly line

Direct Material = 10,000+ 82,000 + 155,500= 247,500

  1. Indirect Materials= Utilities in Factory+ Lubricants in factory+ Freight-in

54500+ 3000+ 3000= 60,500

  1. Period= Depreciation on sales office+ sales commission+ cost to delivery+ Utility in sale office

26500+ 9000+ 23000+ 9000= 67500

  1. Product= direct labor+ Direct materials + consumable production+ supplies+ factory overhead

260,000+247,500+ 155,500+ 3000= 666000

  1. Manufacturing Overhead= Utilities in factory+ Insurance cost+ Lubricant in Factory+ Factory Supervisor+ Depreciation of Factory Equip+ maintenance workers

16000+ 50,500+3000+ 21000+ 54500+ 115,000= 260,000

  1. Conversion= Direct labor + Manufacturing Overhead

260,000+ 155,500= 415500

  1. Prime= Assembly line workers+ Lumber Used + Fabric Used in Upholstery

10,000+ 155500+ 82,000= 247500
 
Multiple Choice Question
Question 5
True (T)
Question 6
False (F)
Question 7.

  1. C) Providing information that managers need to make operational decisions

Question 8

  1. At the end of the accounting period they are incurred in.

Question 9
False (F)
Question 10
False (F)
Question 11
True (T)
Question 12
True (T)
Question 13
False (F)