Accounting Answers

ITC Co. Ltd. completed the following merchandising transactions in the month of May. At the beginning of May, the ledger of Robinson showed Cash balance of $6,000.

a) Journalize the following transactions of May (Assume that the company follows Perpetual Inventor System), by

- - - selecting the accounts to be debited and stating the debit amounts,

- - - selecting the accounts to be credited and stating the credit amounts.

May 7 Received credit from Logun Ltd. for merchandise returned $300.

Account to be debited is

The debit amount is $

Account to be credited is

The credit amount is $

May 10 Paid Logun Ltd. for purchase in May 1.

Account to be debited is

The debit amount is $

Account to be credited (lesser of the two credit accounts) is

The credit amount is $

The other account to be credited is

The credit amount is $ 

Explain at least 3 objectives of a cash budget.                                                           

Robinson Co. Ltd. completed the following merchandising transactions in the month of May.. At the beginning of May, the ledger of Robinson showed Cash balance of $6,000.

a) Journalize the following transactions of May (Assume that the company follows Perpetual Inventor System), by

- - - selecting the accounts to be debited and stating the debit amounts,

- - - selecting the accounts to be credited and stating the credit amounts.

May 1 Purchased merchandise on account from Logun Ltd. $4,600,terms 2/10,n/30.

Account to be debited is

The debit amount is $

Account to be credited is

The credit amount is $

May 2 Sold merchandise on account $2,100,terms 1/15, n/30.The cost of the merchandise sold was $1,300.

Account to be debited in relation to income is

The debit amount is $

Account to be credited in relation to income is

The credit amount is $

The other account to be debited is

The debit amount is $

The other account to be credited is

The credit amount is $

Explain briefly the term “break-even point” and “margin of safety” respectively.

Give two (2) objectives of a cash budget.

MEIMEI company. It will begin operations on July 1, 2009. The following estimates have been prepared:

Sales - cash

• July (RM) = 5,400
• August (RM) = 9,720
• September (RM) = 12,000

Sales - credit

• July (RM) = 12,600
• August (RM) = 22,680
• September (RM) = 28,000

Purchases – cash

• July (RM) = 2,000
• August (RM) =3,000
• September (RM) = 4,000

Purchases - credit

• July (RM) = 15,000
• August (RM) = 16,000
• September (RM) = 17,000

1. 80% of credit purchases are paid in the month of purchase. 20% of credit purchases are paid in the following month.
2. Non-current assets of RM10,000 are to be purchased in the month of August 2021. 50% is pay In the month of purchase and the balance in the following month.

You are to require to:

(a) Prepare a monthly cash budget, in columnar form, showing the bank balance at the

       end of each month, for July, August and September 2009.

Credit Sales     N$ 582 000

Mark-up          30%

Opening Stock    N$ 38,400

Closing Stock     N$ 18,800

Calculate the following

Gross profit                                                  

The Salesman Company currently sells its product for P15 and has variable costs of P7 per unit. Fixed costs are P50,000. Answer the following questions, consider each independently.

• What is the breakeven point in units?
• If fixed costs rise by 20%, what is the breakeven point in pesos?
• If variable costs decline to P5, what is the breakeven point in units?
• If the selling price per unit declines by 10%, what is the breakeven point in pesos?

MEIMEI company. It will begin operations on July 1, 2009. The following estimates have been prepared:

Sales - cash

• July (RM) = 5,400
• August (RM) = 9,720
• September (RM) = 12,000

Sales - credit

• July (RM) = 12,600
• August (RM) = 22,680
• September (RM) = 28,000

Purchases – cash

• July (RM) = 2,000
• August (RM) =3,000
• September (RM) = 4,000

Purchases - credit

• July (RM) = 15,000
• August (RM) = 16,000
• September (RM) = 17,000

1. 30% of credit sales are paid in the month of sale, the balance is payable in the month following sale.
2. The initial cash contributions are RM20,000.
3. Fixed overheads are expected to be RM5,000 per month, including RM1,000 depreciation. 50% of the overheads are paid in the month incurred and the balance are paid in the following month.

You are to require to:

(a)  Prepare a monthly cash budget, in columnar form, showing the bank balance at the

       end of each month, for July, August and September 2009.