ACC 2234–Final Examination_Q #7 Jacques Inc.

Information pertaining to Yekstop Corp.'s sales revenue is presented below:     November   December   January Cash sales $ 96,000     $ 125,000     $ 78,000   Credit sales   288,000       450,000       234,000   Total sales $ 384,000     $ 575,000     $ 312,000       Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.Budgeted cash payments in November for November inventory purchases by Yekstop Corp. are:

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Information pertaining to Collection Corporation's sales revenue is presented below:     November December January Cash sales $ 97,000 $ 126,000 $ 79,000 Credit sales 289,000 451,000 235,000 Total sales $ 386,000 $ 577,000 $ 314,000   Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 70% of the sales projected for the month. All purchases of inventory are on open account; 20% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 50% of the selling prices.   Budgeted cash payments in November for November inventory purchases by Collection Corporation are:

Information pertaining to Collection Corporation's sales revenue is presented below:     November December January Cash sales $ 99,000 $ 128,000 $ 81,000 Credit sales 291,000 453,000 237,000 Total sales $ 390,000 $ 581,000 $ 318,000   Management estimates that 3% of credit sales are eventually uncollectible. Of the collectible credit sales, 60% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 20% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 50% of the selling prices.Budgeted cash payments in December for November inventory purchases by Collection Corporation are: Multiple Choice $42,075. $53,325. $78,000. $156,000. $213,300. Please don't provide answer…

Top executive officers of Vernon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement.     Current Year Sales revenue $ 1,700,000   Cost of goods sold   1,190,000   Gross profit   510,000   Selling & administrative expenses   210,000   Net income $ 300,000       Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $40,000. The president has announced that the company’s goal is to increase net income by 15 percent.   Required The following items are independent of each other:   Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure…

Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of $16,300,000 and cost of goods sold of $8,965,000. Advertising is a key part of Coral Seas' business strategy, and total marketing expense for the year is budgeted at $2,934,000. Total administrative expenses are expected to be $652,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: Question Content Area 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. Coral Seas Jewelry CompanyBudgeted Income StatementFor the Coming Year     $Sales     Less: Cost of goods sold Gross margin   $fill in the blank e744f5f1dfcfffc_5 Less:       $- Select -     - Select - - Select - Operating income   $fill in the blank e744f5f1dfcfffc_11     - Select -     $- Select -   Question Content Area 2. What if Coral Seas had interest payments of…

Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows:   OctoberNovemberDecemberCash sales$ 60,000$ 55,000$ 75,000Credit sales60,00066,00082,500Total$ 120,000$ 121,000$ 157,500     Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount.   Inventory purchases each month are 100% of the cost of the following month’s projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts for early payment are…

Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 25% in the month following sale, and 11% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year:    Month 1 2 3 4 Total sales $74,000 $90,000 $66,000 $44,000 Total cash receipts in Month 4 will be:   Multiple Choice   $36,960.   $64,900.   $50,160.   $48,600.

Sagar

The management of Marigold Industries estimates that credit sales for August, September, October, and November will be $550,000, $735,000, $885,000, and $480,000, respectively. Experience has shown that collections are made as follows: In month of sale   25%   In first month after sale   60%   In second month after sale   10%   Determine the collections from customers in October and November

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Corning Incorporated sells its product for $24 per unit.  Its actual and projected sales follow:     Units Dollars January (actual) 18,500 $444,000 February (actual) 23,000    552,000 March (budgeted) 19,800    475,200 April (budgeted) 18,950    454,800 May (budgeted) 22,000    528,000   Here is added information about Corning’s operations:   All sales are on credit.  Recent experience show that 35% of sales are collected in the month of the sale, 45% in the month following the sale, 17% in the second month after the sale, and 3% prove to be uncollectible.  The product’s purchase price is $15 per unit.  All payments are payable within 21 days.  Thus 30% of purchases in any given month are paid for in that month, with the remaining 70% paid for in the following month.  The company has a policy to maintain an ending inventory of 20% of the next month’s projected sales plus a safety stock of 100 units.  The January 31 and February 28…

Domestic

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow • Sales are budgeted at $300,000 for November, $280,000 for December, and $270,000 for January Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 70% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. . Other monthly expenses to be paid in cash are $23,600. Monthly depreciation is $14,600. Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $573,600 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements for…

Top executive officers of Tildon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement.     Current Year Sales revenue $ 1,600,000   Cost of goods sold   1,120,000   Gross profit   480,000   Selling & administrative expenses   190,000   Net income $ 290,000       Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $30,000. The president has announced that the company’s goal is to increase net income by 15 percent.    Required The following items are independent of each other:   Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production…

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The following information is available in the financial records of Tūī  Ltd, a large retail shop:   Actual Sales Purchases August $770,000 $350,000 September $690,000 $370,000 October $590,000 $480,000 November $830,000 $510,000 Budgeted Sales Purchases December $980,000 $540,000 Receipts from customers are normally 60% in the month of sale, 25% in the month following the sale, and 5% in the second month following the sale.  The balance is expected to be uncollectible. Tūī  Ltd pays for purchases in the following month. Cash payments during December (for expenses other than purchases) are expected to be $288,000. Any excess cash will be invested in short-term securities – these investments have to be made in multiples of $20,000.  Any cash shortage will be borrowed from the Bank of Aotearoa in multiples of $5,000. Tūī Ltd's cash balance on 1 December was $22,000. Prepare a cash budget for Tūī Ltd for December.  Make sure you…

Top executive officers of Benson Company, a merchandising firm, are preparing the next year's budget. The controller has provided everyone with the current year's projected income statement. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Current Year $ 2,000,000 1,500,000 500,000 273,000 $ 227,000 Cost of goods sold is usually 75 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $73,000. The president has announced that the company's goal is to increase net income by 10 percent. Required The following items are independent of each other: a. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? b. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 1 percent.…

Page Company makes 30% of its sales for cash and 70% on account. 60% of the credit sales are collected in the month of sale, 20% in the month following sale, and 17% in the second month following sale. The remainder is uncollectible. The following information has been gathered for the current year: Month Total sales 1 2 $70,000 $90,000 $60,000 $40,000 Total cash receipts in Month 4 will be:

Executive officers of Adams Company are wrestling with their budget for the next year. The following are two different sales estimates provided by two difference sources.   Source of Estimate First Quarter Second Quarter Third Quarter Fourth Quarter Sales manager $ 378,000   $ 316,000   $ 271,000   $ 480,000   Marketing consultant   512,000     469,000     403,000     648,000       Adams’s past experience indicates that cost of goods sold is about 60 percent of sales revenue. The company tries to maintain 15 percent of the next quarter’s expected cost of goods sold as the current quarter’s ending inventory. This year’s ending inventory is $30,000. Next year’s ending inventory is budgeted to be $31,000.   Required Prepare an inventory purchases budget using the sales manager’s estimate. Prepare an inventory purchases budget using the marketing consultant’s estimate.

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