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Instructions: 3. What is Swimwear's maximum loan requirement? 4. What is the firm's maximum surplus balance?

Instructions: 3. What is Swimwear's maximum loan requirement? 4. What is the firm's maximum surplus balance?

FINANCIAL ACCOUNTING
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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75,000 May June July 725,000 475,000 300,000 December January February March 300,000 400,000 550,000 bloe aboog lo teo Collection estimates obtained from the credit and collection departments are as follows 20% of peso sales will be collected in the month of sale; 60% will be collected the mon following the sale; and 20% will be collected two months following the sale. Wages and materials costs related to production, and hence to sales. The production department has estimated theses costs as follows: December January February March P175,000 175,000 250,000 275,000 April lMay June P425,000 175,000 75,000 gniel 12 sis ai l Note, however, that payments for wages and materials are typically paid during the month following the one in which the costs are incurred. Administrative salaries are projected at P25,000 a month; lease payments amoun P20,000 a month; depreciation expenses are P30,000 per month; and miscellaneous overhead expenses total P10,000 a month. Quarterly tax payments of P125,000 must be made in Mard and June; and P250,000 will be needed in April to purchase a new fabric cutting machine. The company expects the firm to have P50,000 on hand at the beginning of January, and she wants to start each month with that amount on hand. As Jill's assistant, you have bee asked to assist her by completing the following tasks. Instructions: e. 3. What is Swimwear's maximum loan requirement? 4. What is the firm's maximum surplus balance?
Transcribed Image Text:75,000 May June July 725,000 475,000 300,000 December January February March 300,000 400,000 550,000 bloe aboog lo teo Collection estimates obtained from the credit and collection departments are as follows 20% of peso sales will be collected in the month of sale; 60% will be collected the mon following the sale; and 20% will be collected two months following the sale. Wages and materials costs related to production, and hence to sales. The production department has estimated theses costs as follows: December January February March P175,000 175,000 250,000 275,000 April lMay June P425,000 175,000 75,000 gniel 12 sis ai l Note, however, that payments for wages and materials are typically paid during the month following the one in which the costs are incurred. Administrative salaries are projected at P25,000 a month; lease payments amoun P20,000 a month; depreciation expenses are P30,000 per month; and miscellaneous overhead expenses total P10,000 a month. Quarterly tax payments of P125,000 must be made in Mard and June; and P250,000 will be needed in April to purchase a new fabric cutting machine. The company expects the firm to have P50,000 on hand at the beginning of January, and she wants to start each month with that amount on hand. As Jill's assistant, you have bee asked to assist her by completing the following tasks. Instructions: e. 3. What is Swimwear's maximum loan requirement? 4. What is the firm's maximum surplus balance?
29 Cloie Boel, financial manager of Swimwear, Inc., is currently forecasting the company's needs for the first half of next year. Swimwear's sales are highly seasonal, with most of its occurring in the spring, just prior to the summer swimming season. The firm's marketing urtment forecasts sales as follows: Chapter 7 Business Planning and Short-Term Budgetary Systems November P 50,000 April May June July P925,000 725,000 475,000 300,000 December January February March 75,000 300,000 400,000 550,000 el Collection estimates obtained from the credit and collection departments aré as follows 20% of peso sales will be collected in the month of sale; 60% will be collected the month following the sale; and 20% will be collected two months following the sale. Wages and materials costs related to production, and hence to sales. The production
Transcribed Image Text:29 Cloie Boel, financial manager of Swimwear, Inc., is currently forecasting the company's needs for the first half of next year. Swimwear's sales are highly seasonal, with most of its occurring in the spring, just prior to the summer swimming season. The firm's marketing urtment forecasts sales as follows: Chapter 7 Business Planning and Short-Term Budgetary Systems November P 50,000 April May June July P925,000 725,000 475,000 300,000 December January February March 75,000 300,000 400,000 550,000 el Collection estimates obtained from the credit and collection departments aré as follows 20% of peso sales will be collected in the month of sale; 60% will be collected the month following the sale; and 20% will be collected two months following the sale. Wages and materials costs related to production, and hence to sales. The production
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