Question 1The management of Target is expecting to commence its operations on June 1, 2022, selling awide range of household items. The company will commence operations with the followingassets:CashInventoryEquipment.LandBuildingsProjected sales for the first four months of 2022 are as follows:JuneJulyAugustSeptember336,000696,0001,200,000Cost of goods soldBad debts744,0004,800,000Thirty per cent of the company's sales will be for cash and the remaining 70 per cent will be oncredit. Sixty-five per cent of the receivables (credit sales) will be collected in the month of thesale and 30 per cent in the following month. The remaining receivables will be deemed bad.Some expenses are expected to vary with the sales in each month as follows:3,360,0006,720,0007,800,0009,600 000Variable selling expensesVariable administration expensesSellingAdministrationDepreciationWages and salariesGeneral expenses65% of sales3% of salesEighty per cent of the merchandise purchased will be paid for in the month in which the purchaseis made and the balance will be paid for in the following month. Seventy-five per cent of thevariable expenses will be paid for in the month in which they were incurred and the balance thefollowing month.4% of sales5% of salesThe ending inventory of each month should be equal to one-fifth of the amount estimated forcost of sales for the coming month. The fixed expenses will be paid for in t month in whichthey are incurred. These expenses for each month are as follows:350,000240.00075,000120,000156,000The company proposes to make an additional investment in equipment of $270,000 in August2022 to handle the increase in sales levels. The company must maintain a bank balance eachmonth of $120 000. The company can borrow any additional funds from the local bank at 5 percent interest per month.(1) Prepare the following schedules for the months of June, July and August, 2022.a) Cash collections scheduleb) Purchases budgetc) Cash disbursement schedule for purchasesd) Cash disbursement schedule for expenses(ii) Use the information from the schedules at (1) above to prepare a cash budget for the monthsof June, July and August, 2022.

Budget : An Estimate is the process of calculation or judgment of the value, number, quantity.It is…

Question 1 The management of Target is expecting to commence its operations on June 1, 2022, selling a wide range of household items. The company will commence operations with the following assets: Cash Inventory Equipment 336,000 696,000 1,200,000 744,000 4,800,000 Land Buildings Projected sales for the first four months of 2022 are as follows: June 3,360,000

Question 1 The management of Target is expecting to commence its operations on June 1, 2022, selling a wide range of household items. The company will commence operations with the following assets: Cash Inventory Equipment 336,000 696,000 1,200,000 744,000 4,800,000 Land Buildings Projected sales for the first four months of 2022 are as follows: June 3,360,000

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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Problem 19-8 Forecasting Payments (LO2) Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter. The sales forecasts for the next five quarters are as follows: Sales forecast First $ 396 Quarter 1 2 3 4 Quarter in Coming Year Second Third $ 333 $ 343 Calculate Paymore's cash payments to its suppliers assuming that two-thirds of the purchases are paid for in the quarter that they are purchased and one-third are paid in the following quarter. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. X Answer is not complete. Payment S 75,000 X Fourth $ 391 Following Year First Quarter $ 391
Problem 5-2 Rancho, Inc. forecasts the following sales for the second quarter of 2020, as well as actual March sales: March (actual) April May June 2nd Q. Total $3,000 $4,000 $5,000 $6,000 $15,000 In addition: The company makes 60% cash sales and 40% credit sales. It collects all credit sales in the month after the sale. The firm budgets $4,400 for monthly operating expenses. That amount includes $400 for depreciation. The firm pays all of its cash-based expenses in the month incurred. Rancho, Inc. had $100 of cash at March 31, 2020, and it must maintain a minimum $500 cash balance at the end of every month to ensure liquidity. The company has a line of credit with its bank that allows borrowing in $100 increments at 12% interest. All borrowing takes place at the beginning of the month in which the company requires cash. The company must repay principal in hundred dollar increments. The credit facility requires Rancho, Inc. to repay all accrued interest to date whenever…
Question 5 View Policies Current Attempt in Progress Braker Manufacturing has a target of carrying closing monthly inventory equal to fifteen percent of next month's projected sales. If the current month's beginning inventory is 8,000 units and it expects to sell 50,000 units this month and 45,000 units next month, how many units should it produce this month? t 47,500 units O 48,750 units O 45,000 units O 50,000 units hp 2 fo 12 ins prt sc 44 delete home & 7 9 backspace lock home K L enter N pause t shift alt ctri Σ I
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QUESTION 2 Answer the questions from the information provided. 2.1 Use the information provided below to calculate the number of units of Product Tex that must be produced for July and August. INFORMATION 2.2 2.3 The estimated sales volume of Product Tex is 25 000 units for June, 21 000 units for July, 30 000 units for August and 36 000 units for September. The policy of management is to maintain an ending finished goods inventory each month equal to 20% of the current month's budgeted sales and 30% of the following month's budgeted sales. Study the information provided below and calculate the expected value of closing inventory as at 31 December 2022, if the FIFO method of inventory valuation is used. INFORMATION The following information was supplied by Sunbeam Manufacturers for 2022 in respect of its finished goods: Inventory on 01 January Cost of production of finished goods manufactured Cost of goods sold Sales value of the goods sold Use the information provided below to…
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Question: 129 A company plans to purchase inventory for the second half of 2014 as follows: July $ 1,00,000 August $ 75,000 September $ 2,25,000 October $1,25,000 November $ 2,50,000 December $ 30,000 They usually pay 50% of inventory purchases in the month of purchase, 35% in the following month, and 15% in the second month. Based on the information, what are the forecasted December cash payments? a. $15,000 b. $18,750 c. $87,500 d. $121,250
QUESTION 21 Kelly Inc. forecasts that production will require 20,000 tons of material over its planning period (250 days). Demand for Kelly's products is stable over time. Ordering costs amount to an average of $5 per order. Holding costs are estimated at $1.25 per ton of material. The EOQ is tons, and the total annual cost of inventory is a. 500; $400 b. 250; $400 c. 400; $250 d. 400; $500
9 Rundle Pointers Corporation expects to begin operations on January 1, year 1; it will operate as a specialty sales company that sells laser pointers over the Internet. Rundle expects sales in January year 1 to total $370,000 and to increase 10 percent per month in February and March. All sales are on account. Rundle expects to collect 70 percent of accounts receivable in the month of sale, 21 percent in the month following the sale, and 9 percent in the second month following the sale. Required a. Prepare a sales budget for the first quarter of year 1. b. Determine the amount of sales revenue Rundle will report on the year 1 first quarterly pro forma income statement. c. Prepare a cash receipts schedule for the first quarter of year 1. d. Determine the amount of accounts receivable as of March 31, year 1. Complete this question by entering your answers in the tabs below. Required Required Required A B Required D с Prepare a sales budget for the first quarter of year 1. Sales Budget…
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