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accounting problems with all solutions




Question;Problem 7-16A Preparing a sales budget and schedule of cash receiptsMcCarty Pointers Corporation expects to begin operations on January 1,2012, it will operate as a specialty sales company that sells laser pointers over the internet. McCarty expects sales in January 2012 to total $200,000 and to increase 10 percent per month in February and March. All sales are on account. McCarty expects to collect 70 percent of accounts receivable in the month of sale, 20 percent in the month following the sale, and 10 percent in the second month following the sale.Requireda. Prepare a sales budget for the first quarter of 2012.b. Determine the amount of sales revenue McCarty will report on the first 2012 quarterly proforma income statement.c. Prepare a cash receipts schedule for the first quarter 2012.d. Determine the amount of accounts receivable as March 31, 2012.Problem 7-21A Preparing budgets with multiple productsHammond Fruits Corporation wholesales peaches and oranges. Lashanda King is working with the company's accountant to prepare next year's budget. Ms. King estimates that sales will increase 5 percent for peaches and 10 percent for oranges. The current year's sales revenue data follow.(look on the excel spead sheet)Based on company's past experience, cost of goods sold is usually 60 percent of sales revenue. Company policy is to keep 10 percent of the next period's estimated cost of goods sold as the current period's ending inventory. (hint: Use cost of goods sold for the first quarter to determine the beginning inventory for the first quarter.)Requireda. Prepare the company 's sales budget for the next for each quarter by individual product.b. If the selling and administrative expenses are estimated to be $700,000, prepare the company's budgeted annual income statement.c. Ms. King estimates next year's ending inventory will be $34,000 for peaches and $56,000 for oranges. Prepare the company's inventory purchases budgets for the next year showing quarterly figures by product.Problem 07-16AMcCARTY POINTERS CORPORATIONa.Sales BudgetJanuaryFebruaryMarchTotalSales on Accountb.Sales revenue for Quarterc. and d.McCARTY POINTERS CORPORATIONSchedule of Cash ReceiptsJanuaryReceipts from January SalesReceipts from January SalesReceipts from January SalesReceipts from February SalesReceipts from February SalesReceipts from February SalesReceipts from March SalesReceipts from March SalesReceipts from March SalesTotalAccounts receivable March 31FebruaryMarchAprilMayGiven Data P07-16A:McCARTY POINTERS CORPORATIONExpected sales in JanuaryGrowth rates for February and MarchAccounts receivable collected:Month of saleMonth following saleSecond month following sale$200,0000. Name:Class:Problem 07-21AHAMMOND FRUITS CORPORATIONa. Sales BudgetSales in Next YearPeachesOrangesTotalb.1st Quarter2nd Quarter3rd Quarter4th QuarterHAMMOND FRUITS CORPORATIONBudgeted Annual Income StatementSales RevenueCost of Goods SoldGross ProfitSelling and Admin. ExpensesNet Incomec.HAMMOND FRUITS CORPORATIONInventory Purchases BudgetPeachesSalesCost of Goods SoldPlus: Desired Ending InventoryInventory NeededLess: Beginning InventoryRequired Purchases1st Quarter2nd Quarter3rd Quarter4th QuarterOrangesSalesCost of Goods SoldPlus: Desired Ending InventoryInventory NeededLess: Beginning InventoryRequired Purchases1st Quarter2nd Quarter3rd Quarter4th QuarterTotalGiven Data P07-21A:HAMMOND FRUITS CORPORATIONExpected annual sales growth rate:PeachesOrangesSales in Current YearPeachesOrangesTotalAdditional Information:Cost of goods sold - percentageof sales revenueEnding inventory - percentage ofnext period's cost of goods soldPart b. - Estimated selling andadministrative expensesPart c. - Estimate of endinginventory for next year:PeachesOranges0.050.11st Quarter$220,000400,000$620,0000.60.1$700,000$34,000$56,0002nd Quarter$240,000450,000$690,0003rd Quarter$300,000570,000$870,0004th Quarter$240,000380,000$620,000Total$1,000,0001,800,000$2,800,000Student Name:Class:Problem 07-22APATEL COMPANYa. Sales BudgetCash SalesSales on AccountTotal Budgeted SalesOctoberNovemberDecemberPro Formab. Schedule of Cash ReceiptsCurrent Cash SalesPlus Collections from A/RTotal CollectionsOctoberNovemberDecemberPro FormaOctoberNovemberDecemberPro FormaDataOctoberNovemberDecemberPro FormaDataOctoberNovemberDecemberPro FormaDataOctoberNovemberDecemberPro FormaDataOctoberNovemberDecemberPro FormaDatac. Inventory Purchases BudgetBudgeted Cost of Goods SoldPlus Desired Ending InventoryInventory NeededLess Beginning InventoryRequired Purchases (on Acct.)d. Schedule of Cash Payments Budget for Inventory PurchasesPayment for Current Month's A/PPayment for Prior Month's A/PTotal Budgeted Paymentse. Selling and Administrative Expense BudgetSalary ExpenseSales CommissionsSupplies ExpenseUtilitiesDepreciation on Store FixtureRentMiscellaneousTotal S&A Expensesf. Schedule of Cash Payments of S&A ExpensesSalary ExpensePrior Month Sales CommissionsSupplies ExpensePrior Month UtilitiesDepreciation on Store EquipmentRentMiscellaneousTotal Payments for S&A Expensesg. Cash BudgetBeginning Cash BalanceAdd Cash ReceiptsCash AvailableLess PaymentsFor Inventory PurchasesFor S&A ExpensesPurchase of Store FixturesInterest ExpenseTotal Budgeted PaymentsPayment Minus ReceiptsSurplus (Shortage)Financing ActivityBorrowing (Repayment)Ending Cash Balanceh.PATEL COMPANYPro Forma Income StatementFor the Quarter Ended December 31, 2009Sales RevenueCost of Goods SoldGross MarginS&A ExpensesOperating IncomeInterest ExpenseNet Incomei.PATEL COMPANYPro Forma Balance SheetDecember 31, 2009AssetsCashAccounts ReceivableInventoryStore EquipmentAccumulated DepreciationBook Value of EquipmentTotal AssetsLiabilitiesAccounts PayableUtilities PayableSales Commissions PayableLine of Credit LiabilityEquityRetained EarningsTotal Liabilities and Equityj.PATEL COMPANYPro Forma Statement of Cash FlowsFor the Quarter Ended December 31, 2009Cash Flow from Operating ActivitiesCash Receipts from CustomersCash Payments for InventoryCash Payments for S&A ExpensesCash Payments for Interest ExpenseNet Cash Flow from Operating ActivitiesCash Flow from Investing ActivitiesCash Payment for Store FixturesCash Flow from Financing ActivitiesNet Inflow from Line of CreditNet Increase in CashPlus Beginning Cash BalanceEnding Cash BalanceGiven Data P07-22A:PATEL COMPANYPart a.October salesSales in cashSales in accounts receivableExpected sales growth per monthPart b.Accounts receivable collected inmonth following salesPart c.Cost of goods sold as percentageof salesEnding inventory - percent of nextmonth's cost of goods soldDecember estimated ending inventoryPart d.Accounts payable paid in monthof purchaseAccounts payable paid in monthfollowing purchasePart e.Salary expense (fixed)Sales commissions (percent of sales)Supplies expense (percent of sales)Utilities (fixed)Depreciation on store equipment (fixed)Rent (fixed)Miscellaneous (fixed)Cost of store fixturesSalvage value - store fixturesUseful life (years) - store fixturesPart g.Borrowing incrementsMonthly interest rateCash cushion$120,0000.40.60.2510.60.1$12,0000.70.3$18,0000.050.02$1,4004,0004,8001,200164,00020,0003$1,0000.01$12,000


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