Wolfpack Company is a merchandising company that is preparing a
budget for the month of July. It has provided the following
|Buildings and equipment, net of depreciation||165,000|
|Liabilities and Stockholders’ Equity|
|Total liabilities and stockholders’ equity||$||354,600|
- All sales are on account. Thirty percent of the credit sales
are collected in the month of sale and the remaining 70% are
collected in the month subsequent to the sale. The accounts
receivable at June 30 will be collected in July.
- All merchandise purchases are on account. Twenty percent of
merchandise inventory purchases are paid in the month of the
purchase and the remaining 80% is paid in the month after the
purchase. The accounts payable at June 30 will be paid in
- The budgeted inventory balance at July 31 is $19,800.
- Depreciation expense is $3,300 per month. All other selling and
administrative expenses are paid in full in the month the expense
- The company’s cash budget for July shows expected cash
collections of $96,300, expected cash disbursements for merchandise
purchases of $72,000, and cash paid for selling and administrative
expenses of $16,100.
1. For the month of July, calculate the following:
a. Budgeted sales
b. Budgeted merchandise purchases
c. Budgeted cost of goods sold
d. Budgeted net operating income
2. Prepare a budgeted balance sheet as of July 31.