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##### Pillows Unlimited makes decorative throw pillows for home use

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Question;Pillows Unlimited makes decorative throw pillows for home use. The company sells the pillows to home d?cor retailers for \$15 per pillow. Each pillow requires 1.5 yards of fabric, which the company obtains at a cost of \$6 per yard. The company would like to maintain an ending stock of fabric equal to 10% of the next month?s production requirements. The company would also like to maintain an ending stock of finished pillows equal to 20% of the next month?s sales. The company projects sales in units to be as follows for the last three months of the year:October 100,000November 110,000December 115,000Requirements:Prepare the following budgets for the first three months of the year, as well as a summary budget for the quarter1. Prepare the sales budget. Assume that 10% of the company?s pillows are cash sales, while the remaining 90% are sold on credit terms.2. Prepare the production budget. Assume that the company anticipates selling 120,000 units in April.3. Prepare the direct materials purchases budget. Assume the company needs 150,000 yards of fabric for production in April.Five Star Service anticipates the following sales revenue over a five-month period:November December January February MarchSales revenue \$10,000 \$15,000 \$12,000 \$14,000 \$16,000Five Star Service?s sales are 25% cash and 75% credit. Five Star Service?s collection history indicates that credit sales are collected as follows:30% in the month of the sale60% in the month after the sale6% two months after the sale4% are never collected4. Prepare a cash receipts budget for January, February, and March.Centennial Corporation is preparing its cash payments budget for next month. The following information pertains to the cash payments:a. Centennial Corporation pays for 50% of its direct materials purchases in the monthOf purchase and the remainder the following month. Last month?s direct material purchases were \$70,000, while Centennial Corporation anticipates \$80,000 of direct material purchases next month.b. Direct labor for the upcoming month is budgeted to be \$32,000 and will be paid at the end of the upcoming month.c. Manufacturing overhead is estimated to be 150% of direct labor cost each months and is paid in the month in which it is incurred. This monthly estimate includes \$11,000 of depreciation on the plant and equipment.d. Monthly operating expenses for next month are expected to be \$43,000, which includes \$2,000 of depreciation on office equipment and \$1,000 of bad debt expense. These monthly operating expenses are paid during the month in which they are incurred.e. Centennial Corporation will be making an estimated tax payment of \$7,000 next month.5. Prepare a cash disbursements budget for next month.Plyers Manufacturing has \$8,300 cash on hand on January 1. The company requires a minimum cash balance of \$7,000. January cash collections are \$584,330. Total cash payments for January are \$583,200. Prepare a cash budget for January.6. How much cash, if any, will Plyers need to borrow by the end of January?XYZ Company, Inc.STATEMENTS OF INCOMEFor the Years ended December 31,2013 2012Net Revenue \$ 46,854 \$ 48,017Cost of goods sold 18,421 19,053Selling, general & administrative expenses 17,310 17,738Other operating charges 895 447Operating income \$ 10,228 \$ 10,779Interest income 534 471Interest expense (463) (397)Other income (loss) ? net 1,178 956Income before income taxes \$ 11,477 \$ 11,809Income taxes 2,851 2,723Net income \$ 8,626 \$ 9,086Average common shares outstanding 4,434 4,504Year end market price per common share 44.27 44.51The company hasno preferred stock.Calculate the following for XYZ Company:1. Earnings per share2. Price-earnings ratio3. Times interest earned ratio4. For each line calculate the amount of change from 2012 to 2013.5. Prepare common-size income statements for both years.

Paper#38117 | Written in 18-Jul-2015

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