Calculate the number of units of finished goods to be manufactured in January 20×1.

SOLUTION AT Australian Expert Writers

MA – CH9 HW2
1.
value: 16.66 points
Coyote Loco, Inc., a manufacturer of salsa, has the following historical collection pattern for its credit sales.
 
70 percent collected in the month of sale.
15 percent collected in the first month after sale.
10 percent collected in the second month after sale.
4 percent collected in the third month after sale.
1 percent uncollectible.
     The sales on account have been budgeted for the last seven months as follows:
 
 
 
 
  June
$
49,000
 
  July
 
60,000
 
  August
 
70,000
 
  September
 
80,000
 
  October
 
90,000
 
  November
 
100,000
 
  December
 
85,000
 
 
1.
Compute the estimated total cash collections during October from credit sales. (Omit the “$” sign in your response.)
  Total cash collections
$
2.
Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter. (Omit the “$” sign in your response.)
  Total cash collections
$
2.
value: 16.66 points
Sound Investments, Inc. is a large retailer of stereo equipment. The controller is about to prepare the budget for the first quarter of 20×2. Past experience has indicated that 75 percent of the store’s sales are cash sales. The collection experience for the sales on account is as follows:
80 percent during month of sale
15 percent during month following sale
5 percent uncollectible
     The total sales for December 20×1 are expected to be $190,000. The controller feels that sales in January 20×2 could range from $100,000 to $160,000.
1.
Demonstrate how financial planning can be used to project cash receipts in January of 20×2 for three different levels of January sales. Use the following columnar format. (Omit the “$” sign in your response.)
 
Total Sales in January 20×2
 
 
 
$100,000
$130,000
$160,000
  Cash receipts in January, 20×2
 
 
 
     From December sales on account
$
$
$
     From January cash sales
 
 
 
     From January sales on account
 
 
 
 
 
 
 
    Total cash receipts
$
$
$
 
 
 
 
——————————————————————————————————————————————
3.
value: 16.66 points
Handy Hardware is a retail hardware store. Information about the store’s operations follows.

November 20×1 sales amounted to $200,000.

Sales are budgeted at $220,000 for December 20×1 and $200,000 for January 20×2.

Collections are expected to be 60 percent in the month of sale and 38 percent in the month following the sale. Two percent of sales are expected to be uncollectible. Bad debts expense is recognized monthly.

The store’s gross margin is 25 percent of its sales revenue.

A total of 80 percent of the merchandise for resale is purchased in the month prior to the month of sale, and 20 percent is purchased in the month of sale. Payment for merchandise is made in the month following the purchase.

Other monthly expenses paid in cash amount to $22,600.

Annual depreciation is $216,000.
The company’s balance sheet as of November 30, 20×1, is as follows:
HANDY HARDWARE, INC. Balance Sheet November 30, 20×1
Assets
  Cash
$
22,000
 
  Accounts receivable (net of $3,500 allowance for uncollectible accounts)
 
76,000
 
  Inventory
 
140,000
 
  Property, plant, and equipment (net of $590,000 accumulated depreciation)
 
862,000
 
 
 
 
 
  Total assets
$
1,100,000
 
 
 
 
 
Liabilities and Stockholders’ Equity
  Accounts payable
$
162,000
 
  Common stock
 
795,000
 
  Retained earnings
 
143,000
 
 
 
 
 
  Total liabilities and stockholders’ equity
$
1,100,000
 
 
 
 
 
 
1.
Compute the budgeted cash collections for December 20×1. (Omit the “$” sign in your response.)
  Budgeted cash collections
$
2.
Compute the budgeted income (loss) before income taxes for December 20×1. (Omit the “$” sign in your response.)
  Budgeted before taxes
$
3.
Compute the projected balance in accounts payable on December 31, 20×1. (Omit the “$” sign in your response.)
  Accounts payable balance
$
—————————————————————————————————————————————
4.
value: 16.66 points
Mary and Kay, Inc., a distributor of cosmetics throughout Florida, is in the process of assembling a cash budget for the first quarter of 20×1. The following information has been extracted from the company’s accounting records:

All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20×0, will be recovered and that the recovery will be in January 20×1.

Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition.

The December 31, 20×0, balance sheet disclosed the following selected figures: cash, $20,000; accounts receivable, $55,000; and accounts payable, $22,000.

Mary and Kay, Inc. maintains a $20,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time.

Additional data:
 
January
February
March
  Sales revenue
$
150,000
 
$
180,000
 
$
185,000
 
  Merchandise purchases
 
90,000
 
 
100,000
 
 
140,000
 
  Cash operating costs
 
31,000
 
 
24,000
 
 
45,000
 
  Proceeds from sale of equipment
 

 
 

 
 
5,000
 
 
1.
Prepare a schedule that discloses the firm’s total cash collections for January through March. (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)
 
January
February
March
  Collection of accounts receivable:
$
$
$
  Collection of January sales
 
 
 
  Collection of February sales
 
 
 
  Collection of March sales
 
 
 
  Sale of equipment
 
 
 
 
 
 
 
       Total cash collections
$
$
$
 
 
 
 
 
2.
Prepare a schedule that discloses the firm’s total cash disbursements for January through March. (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)
 
January
February
March
  Payment of accounts payable
$
$
$
  Payment of January purchases
 
 
 
  Payment of February purchases
 
 
 
  Payment of March purchases
 
 
 
  Cash operating costs
 
 
 
 
 
 
 
       Total cash disbursements
$
$
$
 
 
 
 
 
3.
Prepare a schedule that discloses the firm’s cash needs, if any, for January through March. The schedule should present the following information in the order cited: Beginning cash balance, total receipts (from requirement (1)), total payments (from requirement (2)), the cash excess (deficiency) before financing, borrowing ne-eded to maintain minimum balance, loan principal repaid, loan interest paid, and ending cash balance. (Leave no cells blank – be certain to enter “0” wherever required. Amounts to be deducted should be indicated by a minus sign. Omit the “$” sign in your response.)
 
January
February
March
  Beginning cash balance
$
$
$
  Total receipts
 
 
 
 
 
 
 
       Subtotal
$
$
$
  Less: Total disbursements
 
 
 
 
 
 
 
  Cash excess (deficiency) before financing
$
$
 
  Financing:
 
 
 
       Borrowing to maintain $20,000 balance
 
 
 
       Loan principal repaid
 
 
 
       Loan interest paid
 
 
 
 
 
 
 
  Ending cash balance
$
$
$
——————————————————————————————————————————————
5.
value: 16.66 points
Badlands, Inc. manufactures a household fan that sells for $40 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from the company’s accounting records.

Badlands maintains a minimum cash balance of $30,000. Total payments in January 20×1 are budgeted at $390,000.

A schedule of cash collections for January and February of 20×1 revealed the following receipts for the period:
 
Cash Receipts
 
 
 
January
February
  From December 31 accounts receivable
$
216,000
 
 
 
 
  From January sales
 
152,000
 
$
228,000
 
  From February sales
 
 
 
 
156,800
 
 

March 20×1 sales are expected to total 10,000 units.

Finished-goods inventories are maintained at 20 percent of the following month’s sales.

The December 31, 20×0, balance sheet revealed the following selected figures: cash, $45,000; accounts receivable, $216,000; and finished goods, $44,700.
Required:
1.
Determine the number of units that Badlands sold in December 20×0.
  December sales
units
2.
Compute the sales revenue for March 20×1. (Omit the “$” sign in your response.)
  Sales revenue
$
3.
Compute the total sales revenue to be reported on Badlands’ budgeted income statement for the first quarter of 20×1. (Omit the “$” sign in your response.)
  Total sales revenue
$
4.
Determine the accounts receivable balance to be reported on the March 31, 20×1, budgeted balance sheet. (Omit the “$” sign in your response.)
  Accounts receivable balance
$
5.
Calculate the number of units in the December 31, 20×0, finished-goods inventory.
  Finished-goods inventory
units
6.
Calculate the number of units of finished goods to be manufactured in January 20×1.
  Finished goods to be manufactured
units
7.
Calculate the financing required in January, if any, to maintain the firm’s minimum cash balance. (Omit the “$” sign in your response.)
  Financing required
$
——————————————————————————————————————————————
6.
value: 16.70 points
Scholastic Furniture, Inc. manufactures a variety of desks, chairs, tables, and shelf units that are sold to public school systems throughout the Midwest. The controller of the company’s Desk Division is currently preparing a budget for the second quarter of the year. The following sales forecast has been made by the division’s sales manager.
 
 
 
 
  April
10,000
 desk-and-chair sets
 
  May
12,000
 desk-and-chair sets
 
  June
15,000
 desk-and-chair sets
 
 
 
Each desk-and-chair set requires 10 board feet of pine planks and 1.5 hours of direct labor. Each set sells for $50. Pine planks cost $.50 per board foot, and the division ends each month with enough wood to cover 10 percent of the next month’s production requirements. The division incurs a cost of $20 per hour for direct-labor wages and fringe benefits. The division ends each month with enough finished-goods inventory to cover 20 percent of the next month’s sales.
Required:
Complete the following budget schedules.
1.
Sales budget (Omit the “$” sign in your response):
 
April
May
June
  Sales (in sets)
 
10,000
 
 
 
  Sales price per set
× $
50
 
× $
× $
 
 
 
 
 
 
  Sales revenue
$
500,000
 
$
$
 
 
 
 
 
 
 
2.
Production budget (in sets): (Input all amounts as positive values.)
 
April
May
June
  Sales
10,000
 
 
 
  Add: Desired ending inventory
2,400
 
 
3,000
 
 
 
 
 
  Total requirements
12,400
 
 
 
  Less: Projected beginning inventory
2,000
 
 
 
 
 
 
 
 
   Planned production
10,400
 
 
 
 
 
 
 
 
 
3.
Raw-material purchases (Round your Cost per board foot answers to 2 decimal places. Input all amounts as positive values. Omit the “$” sign in your response):
 
April
May
June
  Planned production (sets)
 
10,400
 
 
 
  Raw material required per set       (board feet)
×
10
 
×
×
 
 
 
 
 
 
  Raw material required for production       (board feet)
 
104,000
 
 
 
  Add: Desired ending inventory of raw       material (board feet) (10% of  next       month’s requirement)
 
12,600
 
 
16,000
 
 
 
 
 
 
  Total requirements
 
116,600
 
 
 
  Less: Projected beginning inventory of       raw material (board feet) (10% of       current  month’s requirement)
 
10,400
 
 
 
 
 
 
 
 
 
  Planned purchases of raw material       (board feet)
 
106,200
 
 
 
  Cost per board foot
× $
.50
 
× $
× $
 
 
 
 
 
 
  Planned purchases of raw material       (dollars)
$
53,100
 
$
$
 
 
 
 
 
 
 
4.
Direct-labor budget (Round your Direct-labor hours per set answers to 1 decimal place. Omit the “$” sign in your response):
 
April
May
June
  Planned production (sets)
 
10,400
 
 
 
  Direct-labor hours per set
×
1.5
 
×
×
 
 
 
 
 
 
  Direct-labor hours required
 
15,600
 
 
 
  Cost per hour
× $
20
 
× $
× $
 
 
 
 
 
 
   Planned direct-labor cost
$
312,000
 
$
$
-2-2
http://ezto.mhedu
-2-2
http://ezto.mhedu
-2-2
http://ezto.mhedu
-2-2
http://ezto.mhedu
(Click to select)
-2-2
http://ezto.mhedu
-2-2
http://ezto.mhedu

Order from Australian Expert Writers
Best Australian Academic Writers

QUALITY: 100% ORIGINAL PAPERNO PLAGIARISM – CUSTOM PAPER