Fábrica de Partes del Noroeste, S.A., opened its doors in January 2018 in the Mexicali Valley, to contribute to good listening and to spread good musical appreciation among the inhabitants, and since then it has fulfilled it. (IMAGE) Below, I present you with additional information from Fábrica de Partes del Noroeste, S.A., in order for you to apply the cash budgeting methods mentioned in the heading, to detect cash needs for the year 2022. Additional information on the plans and projects of Fábrica de Partes del Noroeste, S.A., for the following year (2022) are: (a) To continue producing quality products, it plans to invest in machinery for 2022, for a value of $135,000.00. The estimated useful life for depreciation purposes is 10 years. b) The mortgage is paid in equal annual amortizations. c) The company's cash management policy states that the desired cash balance is the equivalent of 7½% of sales. d) According to its working capital management, prepayments will reduce its balance to $5,512.00 and Sundry Creditors will present a balance of $122,654.00. Taxes payable are in accordance with the income statement. e) In 2022 a capital reserve must be created by taking 5% of the 2021 profits. f) Deferred charges decrease to 75% of their 2021 balance. g) It is considered that accounts receivable, inventories and suppliers will maintain their current behavior, according to their rotations. ATTENTION BARTLEBY EXPERT: focus on answers a) and b). (values for 2022). Ignore the rest.
Fábrica de Partes del Noroeste, S.A., opened its doors in January 2018 in the Mexicali Valley, to contribute to good listening and to spread good musical appreciation among the inhabitants, and since then it has fulfilled it.
(IMAGE)
Below, I present you with additional information from Fábrica de Partes del Noroeste, S.A., in order for you to apply the cash budgeting methods mentioned in the heading, to detect cash needs for the year 2022.
Additional information on the plans and projects of Fábrica de Partes del Noroeste, S.A., for the following year (2022) are:
(a) To continue producing quality products, it plans to invest in machinery for 2022, for a value of $135,000.00. The estimated useful life for
b) The mortgage is paid in equal annual amortizations.
c) The company's cash management policy states that the desired cash balance is the equivalent of 7½% of sales.
d) According to its working capital management, prepayments will reduce its balance to $5,512.00 and Sundry Creditors will present a balance of $122,654.00. Taxes payable are in accordance with the income statement.
e) In 2022 a capital reserve must be created by taking 5% of the 2021 profits.
f) Deferred charges decrease to 75% of their 2021 balance.
g) It is considered that accounts receivable, inventories and suppliers will maintain their current behavior, according to their rotations.
ATTENTION BARTLEBY EXPERT:
focus on answers a) and b). (values for 2022).
Ignore the rest.
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