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** March sales: $7,000 / 0.20 = $35,000 May collections: $35,000 × 0.15 = $5,250
*** June collections of April sales: $42,500 × 0.15 = $6,375

E21-30
Montana Timber Company
Schedule of Cash Disbursements
April, May, and June

April May June

Budgeted sales $180,000 $210,000 $180,000

Lumber purchases* $147,000 $126,000 $161,000
Wages** 27,000 31,500 27,000
Operating expenses*** 16,000 18,000 21,000
Lease payment 12,000 12,000 12,000
Total disbursements $202,000 $187,500 $221,000

*70% of following month's sales, $230,000 × 0.70 of July sales for June purchases **15% of sales
***10% of preceding month's sales, $160,000 × 0.10 for April
E21-31
Waycross Manufacturing
Schedule of Cash Disbursements
For the Months of July and August

July August
Accounts payable (0.5 × $44,000) + (0.5 × $48,000) $ 46,000 (0.5 × $48,000) + (0.5 × $50,000) $ 49,000
Payroll (0.8 × $120,000) + (0.2 × $110,000) 118,000 (0.8 × $100,000) + (0.2 × $120,000) 104,000
Loan payments 15,000 15,000
Total $179,000 $168,000

E21-32
Pendleton Company
Budgeted Income Statement
For the Year Ending December 31, 2013

Sales ($750,000 × 1.05 × 1.08) $850,500
Less bad debts ($850,500 × 0.01) (8,505)
Net sales 841,995
Cost of goods sold ($430,000 × 1.05 × 1.04) (469,560)
Gross profit 372,435
Operating expenses* ([$200,500 - $25,000] × 1.10) + $25,000 (218,050)
Net income $154,385

* Assuming depreciation is based on historical cost, the $25,000 of depreciation is not subject to the 10 percent price increase.

E21-33

a. Wisconsin Booksellers Budgeted Income Statement For the Year Ending December 31, 2013

Sales $1,200,000 Cost of goods sold ($1,200,000 × 0.70) (840,000) Gross margin 360,000 Sales and administrative

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