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BUSN 5200 Homework Assignment for Week 5




Question;Question 1. Prepare a budget for this year for the;Administrative Department at Tom?s Toyota Company based on the following;information;Last Year Forecasting;Assumption Budget for this;Year;Salaries $60,000 2%;increase;Stationary $;900 1% decrease;Telephone $;2,500 3% increase;Electricity $;1,200 2.5% increase;Office Rent $10,000;2% increase;Depreciation $;4,000 no change;Total: $78,600;Question 2. Define a ?Static Budget.?;Question 3. Define a ?Flexible Budget.?;Question 4. Define the term ?Zero-based Budgeting.?;Question 5. Define ?Period Budgets.?;Question 6. Define ?Rolling Budgets.?;Question 7. Big Bob's Discount Appliances expects sales of;$5,000, $5,000, and $10,000 during April, May, and June (big sale in June). To;build business, Big Bob lets all customers buy on credit, and all do so. In the;past, 50% of Big Bob's sales have been collected during the month of sale, 40%;are collected the following month, and 10% the month after that. If this trend;continues, what will be Big Bob's total cash collections in the month of June?;Question 8. Little Louie?s expects to have $100 in cash on;hand at the beginning of June, and the company's target cash balance is $100.;Net cash flow for June is minus $300. Assuming that Little Louie?s borrows to;meet short term cash needs and pays back as soon as surplus cash is available;what will be the company's ending cash balance after financing at the end of;June?;Question 9. Ma & Pa Kettle?s Chili Company has begun;selling a new chili recipe and they want you to help them with next year?s;budgeted financial statements. Using the worksheet below, complete Ma;Pa?s forecast and answer the questions which follow.;Assumptions;To begin with, Ma & Pa are sure sales will grow 50% next;year. Assume that is true. Then assume that COGS, Current Assets, and Current;Liabilities all vary directly with Sales (that means if sales grows a certain;percentage, then the account in question will grow by that same percentage).;Assume that fixed expenses will remain unchanged and that $1,000 worth of new;Fixed Assets will be obtained next year. Lastly, the current dividend policy;will be continued next year.;Ma & Pa Kettle Chili Company, Inc.;Financial Forecast;Estimated;This year for next year;Sales $10,000;COGS 4,000;Gross Profit;6,000;Fixed Expenses 3,000;Before Tax Profit;3,000;Tax @ 33.3333%;1,000;Net Profit;$2,000;Dividends;$0;Current Assets $25,000;Net Fixed Assets;15,000;Total Assets;$40,000;Current Liabilities $17,000;Long term debt 3,000;Common Stock 7,000;Retained Earnings;13,000;Total Liabs & Eq $40,000;Amount need to balance the balance sheet;(Projected total assets minus projected;total liabilities & equity *);* If this number is XXXXX it means Ma & Pa need;additional external funding to finance their projected asset growth. If this;number is XXXXX it means Ma & Pa have programmed too much financing for the;amount of assets they project.


Paper#42510 | Written in 18-Jul-2015

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