Description of this paper

accounting problems with all solutions

Description

solution


Question

Question;1.Create an excel with a budgeted income statement for each of the first two months2.prepare a cash flow analysis for the two month period3. Compute what the accounts receivable and accounts payable balances will be at the end of the two month period.At the start if business operation is $10,000On the first day of the first month of business, an insurance premium of $6,000 is due. The term of this policy is for one year.The owner provides the following estimates for the first two months of business:Sales:$40,000 in first month, and $60,000in second month.Cost of sales: 35%Cost of labor: 30%Cost of related payroll(payroll taxes, benefits):25% of payrollSupplies:5% of salesAdvertising: $600 monthlyDepreciation: $1,000 monthlyRent: $3,000 monthlyAll other expenses: 12% of salesThe owner provides the following statistical information bases on industry studies and personal estimates:Sales are estimated to be 80% cash and 20% accounts receivable. The accounts receivable are collected in the month following the salesCost of sales represent purchases. The purchase are estimated to be 90% on accounts payable and 10 percent cash. The accounts payable are paid In the month following the saleAll other expenses are paid in the current monthA delivery truck is required for the second month of business. This vehicle will cost $25,000 and requires a $4,000 down payment. Payments on the note start the third month of business.

 

Paper#42650 | Written in 18-Jul-2015

Price : $18
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