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finance question




Question;Financial & Managerial Accting MBA-5601.McCarty 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.Required:a. 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 pro forma income statement.c. Prepare a cash receipts schedule for the first quarter of 2012.d. Determine the amount of accounts receivable as of March 31, 2012.2.;Preparing pro form income statements with different assumptions. Top;executive officers of Zottoli Company, a merchandising firm, are;preparing the next year?s budget. The controller has provided everyone;with the current year?s projected income statement. Sales revenue;$2,000.000 Cost of goods sold 1,400,000 Gross profit 600,000 Net income;340,000 Cost of goods sold is usually 70 percent of sales revenue, and;selling and administrative expenses are usually 10 percent of sales plus;a fixed cost of $60,000. The president has announced that the company?s;goal is to increase net income by 15 percent. Required a. What;percentage increase in sales would enable the company to reach its goal?;Support your answer with a pro forma income statement. b. The market;may become stagnant next year, and the company does not expect an;increase in sales revenue. The production manager believes that an;improved production procedure can cut cost of goods sold by 2 percent.;What else can the company do to reach its goal? Prepare a pro forma;income statement illustrating your proposal. c. The company decides to;escalate its advertising campaign to boost consumer recognition, which;will increase selling and administrative expenses to $340,000. With the;increased advertising, the company expects sales revenue to increase by;15 percent. Assume that cost of goods sold remains a constant proportion;of sales. Can the company reach its goal?3. P14-20 Kinnion Medical;Clinic has budgeted the following cash flows. January February March;Cash receipts$ 100,000 $106,000 $126,000 Cash payments For inventory;purchases 90,000 72,000 85,000 For S&A expenses 31,000 32,000 27,000;Kinnion Medical had a cash balance of $8,000 on January 1. The company;desires to maintain a cash cushion of $5,000. Funds are assumed to be;borrowed, in increments of $1,000, and repaid on the last day of each;month, the interest rate is 1 percent per month. Kinnion pays its vendor;on the last day of the month also. The company had a monthly $40,000;beginning balance in its line of credit liability account from this;year?s quarterly results. Required Prepare a cash budget. (Round all;computations to the nearest whole dollar.)


Paper#51361 | Written in 18-Jul-2015

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