BARRY'S SUPERSTOREBARRY'S SUPERSTOREComparative Year-End Income StatementsComparative Year-End Balance SheetsPrior YearCurrent YearPrior Year Current YearAssets:CashNet Sales$100,000$120,000Cost of Goods Sold50.00060,000$90,000$110,000Gross Profit50,00060,000Accounts Receivable20,00030,00035,00015,000160,00040,000$200.000Inventory40,0005,00020,000200.00050,000$250.000Rent ExpenseDepreciation Expense5,500Short-Term Investments2.5003,600Total Current AsstesSalaries ExpenseUtlity Expense3,0005,400EquipmentTotal Assets1.5002,500Operating Income38,00043,000Liabilities:$ 75.00025.000100,000Accounts Payable$ 60.000Interest Expense3,0002,000Unearned Revenue10.000Income Tax Expense70,0005.000$ 30,0006,000Total Current LiabilitiesNet Income$ 35,000Notes PayableTotal Liabilities40,000110,00050,000150.000Stockholder EquityCommon Stock75,00080.000Ending Retained EarningsTotal Stockholder EquityTotal Liabilities and Stockholder Equity20.000100.00015,00090,000$200.000$250.000 1. Caribbean Health Foods had sales of $125,000 in March. and Forecast sales for Aprilis expected to be 130,000. The firm has a cash balance of $5,000 on April 1 andwishes to maintain a minimum cash balance of $25,000.(1) The firm makes 70% of sales for cash, 30% are collected in the next month.The firm's actual for March is $75,000 and the expected purchases for April is$80,000, 50% made for cash and 50% paid in the next month.Rent is $10,000 per month.(4) Wages and salaries are 45% of the previous month's sales.(5) Cash dividends of $5,000 will be paid in April.(6) Payment of principal and interest of $4,000 is paid monthly.(7) A cash purchase of equipment costing $10,000 is scheduled in April.(8) Taxes of $2,000 are due in April.Requirement:Given the above data, prepare and interpret a cash budget for the month of April.2. Barry's Superstore wishes to prepare financial plans. Use the financial statements onthe next page and the other information provided below to prepare the financial plans.The following financial data are also available:(1) The firm has estimated that its sales for next year will be $130,000.(2) The firm expects to pay $30,000 in cash dividends.(3) The firm wishes to maintain a minimum cash balance of $25,000.(4) Accounts receivable represent approximately 20% of annual sales.(5) The firm's ending inventory represents 60% of Cost of Goods Sold.(6) A new machine costing $15,000 will be purchased next year.(7) Accounts payable will increase by 5%.(8) Uneamed Revenue will be earned.(9) Notes Payable would decrease by $5000.(10) Short-Term Investments and common stock will remain unchanged.Requirement:a. Prepare a pro forma income statement for the year ended December 31, 2021, usingthe percent-of-sales method. Tax Rate is expected to be 15%.b. Prepare a pro forma balance sheet dated December 31, 2021, using the judgmentalapproach.c. Analyze these statements, and discuss the resulting external financing required

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Answered: 1. Caribbean Health Foods had sales of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A company is preparing its cash budget for the upcoming quarter. The company's sales are expected to be $500,000 in January, $600,000 in February, and $700,000 in March. The company's cost of goods sold is 60% of sales. The company's beginning cash balance is $50,000, and the company desires to maintain a minimum cash balance of $25,000. How much financing does the company need in February? $25,000 $60,000 $0 $35,000
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…
Petlassa is a company with a large distribution network and selling automobile tires.The company's finance manager will meet with the General Manager to discuss the financial information for the next 3 months. USD sales amount for the past month and for the next 3 monthsSales forecasts are given below:Last Month:May 250,000Predictions:June 100,000July 150,000August 250,000September 100,000the company collects 40% of its sales in cash, 60% as 1 month term..- Purchases make up 60% of sales. One month before Petlassa's salesmaking the relevant purchase; but the payment is made 1 month after the purchase date.realizes.- labor costs are 5% of sales and are paid in the relevant month.- General Management expenses amount to 15% of the sales and are paid in the relevant month.- 10,000 USD income tax will be paid in August.- 50,000 USD dividend payment will be made in June.- The cash balance on June 1 is 80,000 USD and the cash balance is at the end of each monthIt is required to be 60,000…
Jayden's Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mrs. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures: Actual Forecast November December $460,000 January 480,000 February March Additional Information $540,000 April forecast $470,000 580,000 480,000 Of the firm's sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 35 percent are paid in the month after sale and 65 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month's expected sales. Materials are paid for in the month after they are received. Labor expense is 35 percent of sales and is paid for in the month of sales. Selling and administrative expense is…
General Manager of Marketing, has recently completed a sales forecast. She believes the company’s sales during the first quarter of 20x1 will increase by 10 percent each month over the previous month’s sales. Then Wilcox expects sales to remain constant for several months. Intercoastal’s projected balance sheet as of December 31, 20x0, is as follows: Cash$55,000 Accounts receivable 324,000 Marketable securities 15,000 Inventory 211,200 Buildings and equipment (net of accumulated depreciation) 634,000 Total assets$1,239,200 Accounts payable$241,920 Bond interest payable 6,250 Property taxes payable 6,000 Bonds payable (5%; due in 20x6) 300,000 Common stock 500,000 Retained earnings 185,030 Total liabilities and stockholders’ equity$1,239,200 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1. In the process, the following information has been accumulated:Projected sales for December of 20x0 are $480,000. Credit sales typically are 75…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell any plant and…
Neon Inc.’s forecast sales for July is $72,000. It has $15,000 in accounts receivable at the end of June. 30% of its total sales are expected to be cash sales. Of the remaining 70%, 80% are expected to be collected in the month of the sale and the remaining 20% in the month following the sale. Determine the amount of accounts receivable at the end of July. Group of answer choices $79,200 $61,920 $10,080 $40,320
Star Company was organized on August 1 of the current year. Projected sales for the next three months are as follows: August $250,000 September 200,000 October 275,000 The company expects to sell 50% of its merchandise for cash. Of the sales on credit, 30% are expected to be collected in the month of the sale and the remainder in the following month. What is Star Company expected cash collection for September?
please answer within 30 minutes. Projected Cash Receipts,Romaris Brothers Inc. needs a cash receipts schedule for the months of April, May, and June. Actual Sales: February = $500,000, March = $500,000. Forecast Sales: April =$560,000, May= $610,000, June= $650,000, July= $650,000, Assuming that sales are the only source of cash inflows and that 30% of them are for cash and the remainder are collected evenly over the following 2 months. Prepare a schedule of projected cash receipts for April, May and June. Projected Cash Disbursements Romaris Brothers Inc. needs a cash disbursement schedule for the months of April, May, and June. The following information was collected from financial records: Purchases: Purchases are calculated as 50% of the next month’s sales, 15% of purchases are made in cash, 60% of purchases are paid for 1 month after purchase, and the remaining 25% of purchases are paid for 2 months after purchase. Rent: The firm pays rent of $9,000 per month. Wages and…
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or sell…
The following information is available on two mutually exclusive projects. All numbers are in ‘000s. Project Year 0 Year 1 Year 2 Year 3 Year 4 A $700 $300 $300 $400 $400 B $700 $600 $300 $200 $100 a: If the minimum acceptable rate of return is 10%, which project should be selected using the Net Present Value (NPV) method? Which project should be selected if the Internal Rate of Return (IRR) method is used? b: At what cross‐over rate would the firm be indifferent between the two projects? What is the NPV for both projects at the crossover rate? c: How much should cash flow in year 3 for project B increase or decrease in order for NPV(B) to be equal to NPV(A)?
Valley's managers have made the following additional assumptions and estimates: Estimated sales for July and August are $345,000 and $315,000 respectively Each month's sales are 20% cash sales and 80% credit sales. Each month's credit sales are collected 30% in the month of the sale and 70% in the month following the sale. All of the accounts receivable at June 30 will be collected in July Each month's ending inventory must equal 20% of the cost of the next month's sales. The Cost of Goods Sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July Monthly selling and administrative expenses are always $75,000. Each month $10,000 of this total amount is depreciation expense and the remaining $65,000 relates to expenses that are paid in the month they are incurred The company does not plan to buy or…

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