Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believesthat it will need to borrow cash to continue operations. It began negotiating for a one-month bank loan of$500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month andrequire the company to repay interest and principal on May 31. In considering the loan, the bankrequested a projected income statement and cash budget for May.The following information is available:The company budgeted sales at 600,000 units per month in April, June, and July and at 500,000units in May. The selling price is $4 per unit.The inventory of finished goods on April 1 was 120,000 units. The finished goods inventory at the endof each month equals 20 percent of sales anticipated for the following month. There is no work inprocess.The inventory of raw materials on April 1 was 58,000 pounds. At the end of each month, the rawmaterials inventory equals no less than 40 percent of production requirements for the followingmonth. The company purchases materials in quantities of 70,500 pounds per shipment.Selling expenses are 10 percent of gross sales. Administrative expenses, which include depreciationof $2,000 per month on office furniture and fixtures, total $155,000 per month.The manufacturing budget for tiles, based on normal production of 500,000 units per month, follows:Materials ( 0.25 pound per tile, 125,000 pounds, $4 per pound)LaborVariable overhead$500,000410,000200,000390,000Fixed overhead (includes depreciation of $220,000)Total$1,500,000Required:a-1. Prepare schedules computing inventory budgets by months for production in units for April, May, andJune.a-2. Prepare schedules computing inventory budgets by months for raw materials purchases in poundsfor April and May.b. Prepare a projected income statement for May. Cost of goods sold should equal the variablemanufacturing cost per unit times the number of units sold plus the total fixed manufacturing costbudgeted for the period. When calculating net sales assume cash discounts of 1 percent and bad debtexpense of O.50 percent. Prepare a projected income statement for May. Cost of goods sold should equal the variable manufacturing costthe number of units sold plus the total fixed manufacturing cost budgeted for the period. When calculating netcash discounts of 1 percent and bad debt expense of 0.50 percent. (Do not round intermediate calculations.)BRIGHTON, INC.Projected Income StatementFor the Month of MayNet Sales$Cost of Sales:$Expenses:$< Req A2Req B >

IS termed as Income statement which refers to the one of the FS (Financial statement of business)…

ighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller belle hat it will need to borrow cash to continue operations. It began negotiating for a one-month bank 500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month and equire the company to repay interest and principal on May 31. In considering the loan, the bank equested a projected income statement and cash budget for May. he following information is available: The company budgeted sales at 600,000 units per month in April, June, and July and at 500,0 units in May. The selling price is $4 per unit. The inventory of finished goods on April 1 was 120,000 units. The finished goods inventory at of each month equals 20 percent of sales anticipated for the following month. There is no wor process. The inventory of raw materials on April 1 was 58,000 pounds. At the end of each month, the ra materials inventory oguals no loss than 40 percent of production reguirements for the followwin

ighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller belle hat it will need to borrow cash to continue operations. It began negotiating for a one-month bank 500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month and equire the company to repay interest and principal on May 31. In considering the loan, the bank equested a projected income statement and cash budget for May. he following information is available: The company budgeted sales at 600,000 units per month in April, June, and July and at 500,0 units in May. The selling price is $4 per unit. The inventory of finished goods on April 1 was 120,000 units. The finished goods inventory at of each month equals 20 percent of sales anticipated for the following month. There is no wor process. The inventory of raw materials on April 1 was 58,000 pounds. At the end of each month, the ra materials inventory oguals no loss than 40 percent of production reguirements for the followwin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Help me please
To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) Could you please help me answer 7-9?
RPS co-op introduced a loyalty program in 2020. every customer who signed up would receive 3% of their total purchases as a cheque, each February for the previuos year, that could br used in sotre on any merchandise eithin the next nine months. customers could look online during the year and check their balance at any time. Laura signed up for the program in 2020. when she purchased a kayak in July for 1100. later in september she purchased a mountain bike for 2200. in March 2021 she purchased a paddle board for 2100 and used her cheque toward the purchase. A) Record the sale of Kayak and loyalty points. B)Record sale of mountain bike and loyalty points C) Record the sales of paddleboard, use of rewards points, cheque towards its purchase and the rewards points earned on sale. D) In 2020 RPS Co-op had a total pf 497,000 in sales to customers who had signed up with the loyalty program. What is the amount of liability that woudl be created by these sale?
You are looking for a bank in which to open a checking account for your new part-time business. You estimate that in the first year, you will be writing 30 checks per month and will make three debit transactions per month. Your average daily balance is estimated to be $900 for the first six months and $2,400 for the next six months. Use the following information to solve the problem. Bank Monthly Fees and Conditions Bank 1 $16.00 with $1,000 min. daily balance-or-$25.00 under $1,000 min. daily balance Bank 2 $4.50 plus $0.40 per check over 10 checks monthly$1.00 per debit transaction Bank 3 $5 plus $0.25 per check$2.00 per debit transaction Bank 4 $8 plus $0.15 per check$1.50 per debit transaction (a) Calculate the cost (in $) of doing business with each bank for a year. Bank 1 Bank 2 Bank 3 Bank 4 (b) Which bank should you choose for your checking account? Bank 1 Bank 2 Bank 3 Bank 4
and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts Cash payments $ 517,000 409,500 480,000 $ 459,400 351,900 524,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Answer is complete but not entirely correct. KAYAK COMPANY Beginning cash balance Add: Cash receipts Cash Budget January February March SA 40,000 $ 40,000 $ 74,168 517,000 409,500 480,000 557,000 449,500…
You are the accounting manager for Kool Ragz, Inc., a manufacturer of men's and women's clothing. The company needs to borrow $1,500,000 for 90 days in order to purchase a large quantity of material at "closeout" prices. The interest rate for such loans at your bank, Rimrock Bank, is 15% using ordinary interest. (a) What is the amount (in $) of interest on this loan? (b) After making a few "shopping" calls, you find that Southside National Bank will lend at 15% using exact interest. What is the amount (in $) of interest on this offer? (Round your answer to two decimal places.) (c) So that it can keep your business, Rimrock Bank has offered a loan at 14.5% using ordinary interest. What is the amount (in $) of interest on this offer? (d) (Challenge) If Southside National wants to compete with Rimrock's last offer (part c) by charging $1,375 less interest, what rate (as a %), rounded to the nearest hundredths of a percent, must it quote using exact interest?
Wally has provided the information below – and asked you to create an Income Statement and Balance Sheet for AndrewCo for the year ended December 31, 2019. Sales were $1,200,000 Gross profit margin was 50% Operating margins were 10% The Bank of Toronto provided a loan on Jan 1, 2019 worth $300,000. The annual interest is 8% and is compounded annually. Interest only payments are needed – until the loan is due in 10 years, where a balloon payment for the full balance must be paid. The combined federal and provincial tax rates is 25% Wally knows that the ending cash balance in his company is 200,000. Accounts Receivables is 12% of sales Inventory is 15% of sales Accounts Payable is 5% of sales Accrued expenses payable is 5.5% of sales Capital equipment purchases were made at the start of the year. These total $50,000. These depreciate at 10% per year The owner will provide all other capital in the form of equity financing Wally has asked you to figure out his Selling General and…
Karim Corp. requires a minimum $9,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $9,400, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. July August September Cash receipts $ 25,000 $ 33,000 $ 41,000 Cash payments 29,500 31,000 33,000 Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) KARIM CORP. Cash Budget For July, August, and September July August September Beginning cash balance $9,400 Total cash available Preliminary cash balance Ending cash…
Financial information for Strawberry’s Place is as follows: Cash at 1/1/20X1 is $10,000. The firm desires to maintain a minimum balance of $10,000 at the end of each month. Total monthly sales are as follows: DecemberJanuaryFebruary 20X020X120X1 $120,000150,000 (est.)160,000 (est.) The sales are 40 percent cash and 60 percent credit card. Visa is the only acceptable credit card at Strawberry’s, and assume the charges are converted to cash the day of the sale. The brokerage charge is 2 percent of the sale. Expected other income is $2,000 from interest to be received in February. In addition, in January, a range with a net book value of $300 is expected to be sold for cash, resulting in a $1,000 gain on the sale. Food and beverages are paid for the month following the sale and average 40 percent and 25 percent, respectively. Food sales are four times beverage sales. Total sales consist of only food and beverage sales. Labor is paid for the last day of the month and…