Answered: Discuss this comment by a small-town…

Discuss this comment by a small-town bank president:“Budgeting is a waste of time. I’ve been running this business for 40 years. I don’t need to plan.”

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hackshaw Co. was formed three years ago by Glenn Holding. It started as a very small company but began to expand rapidly. With the growth in the company, the owner decided to implement a formal budgetary control process. Glenn Holding provided some data and projections to the company’s Accountant which the Accountant used to prepare the master budget for the company. The master budget was then broken down into departmental budgets. These departmental budgets were distributed to the department managers with a cover letter explaining the new budgeting system and requesting the support of everyone in achieving the targets. Most of the department managers were displeased with the budget. They felt that the targets were not realistically attainable. Outline to the Managers of Hackshaw what is Budgeting and why Budgetary Control is vital to the success of the organization.
Assume that you are the CEO ofa bank and your CIO comes toyou with a proposal that willrequire doubling the budget forIT (from 7% of revenue to 14% ofrevenue) to be able to cope withFin Tech disruptions. What wouldyou do and how would you justifyit?
Bank Suva was the oldest and largest of the three in a city in a city of 2 million people. Profits had stagnated in recent years. The president was concerned about the erosion of the bank's profitability and wanted to turn the situation around. A research consultant, who was completing his doctorate in business administration, was asked to help the president. Preliminary discussions between the research consultant and the president indicated that a decline in the level of deposits affected profits. The deposits were linked to the bank's competitive position. What is the problem of the case?
Although most new businesses begin on shoestring budgets and the accounting is typically done on a cash basis, it’s still important to consider what the Balance Sheet and Income Statement can tell us about our company’s health and the direction in which it’s headed. Explain how each of these financial reports accomplishes that and why assets and liabilities are listed in a particular order
You recently began a job as an accounting intern at Raymond Adventures. Your first task was to help prepare the cash budget for February and March. Unfortunately, the computer with the budget file crashed, and you did not have a backup or even a hard copy. You ran a program to salvage bits of data from the budget file. After entering the following data in the budget, you may have just enough information to reconstruct the budget. Raymond Adventures eliminates any cash deficiency by borrowing the exact amount needed from State Street Bank, where the current interest rate is 8%. Raymond Adventures pays interest on its outstanding debt at the end of each month. The company also repays all borrowed amounts at the end of the month as cash becomes available. Complete the following cash budget: Raymond Adventures Cash Budget February and March…
Note:- • Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. • Answer completely. • You will get up vote for sure.
Jason Zhang has recently been hired as a financial analyst for Abbots Masonry Ltd. The CEO has come to Jason with some questions about cash budgeting and whether the company should start budgeting for cash on a monthly or annual basis. Required: Prepare the answers to the CEO’s questions as follows: a) What are the objectives of cash budgeting? b) Discuss the advantages and disadvantages of preparing a cash budget on a monthly basis versus on an annual basis.
Is ABC Manufacturing is properly using the budget process to plan for next year's expenses? You have just been hired at ABC Manufacturing, and your supervisor has invited you to sit in on today's budget meeting. You are given a copy of the following proposed budget for next year to review. The budget is being used by ABC to plan for next year. Your supervisor tells you right before the meeting, "We always overestimate because the president always makes us cut the budget by 20%, and besides, I really want to go to that conference in Las Vegas next year." He continued," I have really worked hard this year and put in a lot of overtime so I deserve it." ABC MANUFACTURING Budgeted Income Statement // For the Year Ended Dec. 31, 20XX REVENUE: Sales COST OF GOODS SOLD: Cost of Goods Sold GROSS PROFIT EXPENSES: Advertising Cleaning Insurance Phone Rent Supplies Taxes Training/Education Utilities Wages Total Expenses NET INCOME 9,500 1,800 28,000 3,600 24,000 6,500 10,000 9,800 8,500 150,000…
Can someone explain to me how to solve for this? Please don't answer in handwritten..thanku
You were recently hired to work in the controller's office of the Balboa Lumber Company. Your boss, Alfred Eagleton, took you to lunch during your first week and asked a favor. "Things have been a little slow lately, and we need to borrow a little cash to tide us over. Our inventory has been building up and the CFO wants to pledge the inventory as collateral for a short-term loan. But I have a better idea." Mr. Eagleton went on to describe his plan. "On July 1, 2021, the first day of the company's third quarter, we will sell $100,000 of inventory to the Harbaugh Corporation for $160,000. Harbaugh will pay us immediately and then we will agree to repurchase the merchandise in two months for $164,000. The $4,000 is Harbaugh's fee for holding the inventory and for providing financing. I already checked with Harbaugh's controller and he has agreed to the arrangement. Not only will we obtain the financing we need, but the third quarter's before-tax profits will be increased by $56,000, the…
Boris runs a small manufacturing operation, producing and selling machine parts to European companies. At the start of April, his bank account had an overdrawn bank balance of $2,500. His bank has asked him to produce a budgeted bank balance for the end of April. Boris estimates that his customers will pay him $41,000 of what is owed while he will pay his suppliers $26,000 during the month. What is Boris's budgeted bank account balance at the end of April? $17,500 overdrawn $12,500 overdrawn $12,500 positive balance $17,500 positive balance
Based on the data below, this company has lost funds for the posted years and should forecast as such. This organization should plan cuts. Do you agree? Why? What would you do if you are the leadership?