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1、PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPAMcGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 23MASTER BUDGETS AND PLANNING23 - 2Communicates manageme
2、nt plans throughout the organization.Provides a benchmark for evaluating performance.Promotes analysis and a focus on the future.Converts long-term strategic plans intoshort-term financial plans.Motivates employees through participation in the budgeting process and the establishment of attainable go
3、als.Enhances coordination so that activities of all units contribute to meeting the companys overall goals.BudgetBudget ProcessProcessC 123 - 3Consists of managers from all departments of the organization.Provides central guidance to insure that individual budgets submitted from all departments are
4、realistic and coordinated.BUDGET COMMITTEEC 123 - 4Flow of budget data is a bottom-up process.BUDGET COMMITTEEC 123 - 52009201020112012Operating BudgetThe annual operating budget may be divided into quarterly or monthly budgets.BUDGET TIMINGA continuous or rolling budget is a twelve-month budget tha
5、t rolls forward one month as the current month is completed.C 123 - 6MASTER BUDGET COMPONENTSSales budgetMerchandise purchasesPreparefinancialbudgets: Cash Income statement Balance sheetPrepare capital expenditure budgetPrepare selling and general administrative budgetsC 223 - 7Sales BudgetEstimated
6、 Unit SalesEstimated Unit PriceAnalysis of economic and market conditions + Forecasts of customer needs from marketing personnelSALES BUDGETP 123 - 8In September 2011, Hockey Den sold 700 hockey sticks at $100 each. Hockey Den prepared the following sales budget for the next four months: SALES BUDGE
7、TP 123 - 9SALES BUDGETP 123 - 10The quantity purchased will be affected by: Just-in-time inventory systems that enable purchases of smaller, frequently delivered quantities.Safety stock inventory systems that provide protection against lost sales caused by delays in supplier shipments. MERCHANDISE P
8、URCHASES BUDGETP 123 - 11Hockey Den buys hockey sticks for $60 each and maintains an ending inventory equal to 90 percent of the next months budgeted sales. On September 30, 900 hockey sticks are on hand.Inventory to be purchased=Budgeted ending inventory+Budgeted cost of sales for the periodBudgete
9、d beginning inventoryLets prepare the purchases budget for Hockey Den.MERCHANDISE PURCHASES BUDGETP 123 - 12 MERCHANDISE PURCHASES BUDGETP 123 - 13Lets prepare the selling expense budget for Hockey Den. Hockey Den pays sales commissions equal to 10 percent of total sales. Hockey Den pays a monthly s
10、alary of $2,000 to its sales manager. SELLING EXPENSE BUDGETP 123 - 14From Hockey Dens sales budgetP 1SELLING EXPENSE BUDGET23 - 15Lets prepare the general and administrative expense budget for Hockey Den. General and administrative salaries are $4,500 per month. Depreciation of equipment is $1,500
11、per month. GENERAL AND ADMINISTRATIVE EXPENSE BUDGETP 123 - 16P 1GENERAL AND ADMINISTRATIVE EXPENSE BUDGET23 - 17CAPITAL EXPENDITURES BUDGETHockey Den does not anticipate disposal of any plant assets through December 2011, but management is planning to acquire additional equipment for $25,000 cash i
12、n December 2011. Since this is the only budgeted capital expenditure for the quarter, no separate budget is shown.P 123 - 18Cash Budget Expected Receipts and DisbursementsBudgeted Income StatementBudgeted Balance SheetFINANCIAL BUDGETSP 223 - 19 Forty percent of Hockey Dens sales are for cash. The r
13、emaining 60 percent are credit sales that are collected in full in the month following the sale.Lets prepare the cash receipts budget for Hockey Den. BUDGETED CASH RECEIPTSP 223 - 20From Hockey Dens sales budget60 percent of September sales are collected in October40% of sales60% of salesP 2BUDGETED
14、 CASH RECEIPTS23 - 21 Hockey Dens purchases of merchandise are entirely on account. Full payment is made in the month following the purchase. The September 30 balance of Accounts Payable is $58,200.Lets look at cash disbursements for purchases for Hockey Den. P 2CASH DISBURSEMENTS FOR PURCHASES23 -
15、22From merchandise purchases budgetCASH DISBURSEMENTS FOR PURCHASESP 223 - 23Hockey Den: Has a September 30 cash balance of $20,000. Will pay a cash dividend of $3,000 in November.ContinueCASH BUDGETP 2Beginning Cash BalanceBudgeted Cash ReceiptsBudgeted Cash DisbursementsPreliminary Cash Balance+=
16、If adequate, repay loans or buy securities. If inadequate, increase short-term loans.23 - 24Hockey Den: Has an income tax liability of $20,000 from the previous quarter that will be paid in October. Will purchase $25,000 of equipment in December. Has an agreement with its bank for loans at the end of each month to enable a minimum cash balance of $20,000. Pays interest each month equal to one percent of t
