Accounting 2302 Summer 2015 – Budget Project

916 WordsJun 13, 20164 Pages
ACCOUNTING 2302 Summer 2015 – BUDGET PROJECT Click Link Below To Buy: http://hwcampus.com/shop/accounting-2302-budget-project/ Or Visit www.hwcampus.com Objective: To understand and apply the basic concepts of profit planning. Due date: At the end of class 13 Late submissions will be penalized 15 points and will be accepted no later than class 15 Grading: This project is worth 40 points. Required: You need to prepare a comprehensive 6-month budget, including supporting schedules and a report for the period January 1, 2010 to June 30, 2010 for Henron, Inc (a fictional company). This project must include: 1. Sales Forecast and Budget.......... 2. Cash Receipts budget................ 3.…show more content…
7. Forty percent of the inventory purchases are paid for in the month of purchase and the remaining 60% are paid in the following month (i.e. all of the previous month’s Accounts Payable are paid off by the end of any month.) 8. Per a prior contract, a cash payment of $50,000 for equipment previously purchased is due in January. Another payment of $30,000 is due in February. Depreciation on the equipment previously purchased is included in the overhead cost detailed in item 11 below. Also, dividends of $12,000 are to be paid in March. 9. Monthly operating expenses consist of the following (if these are cash expenses, they are paid when incurred): Salaries and Wages $3,000 Sales Commissions 7% of sales revenue Rent $8,000 Other Variable Cash Expenses 6% of sales revenue Supplies Expense: See note $2,000 Other: See note $48,000 Note: Other general and administrative overhead is expected to be $48,000 per month. Of this amount, $24,000 represents depreciation and other non-cash expenses. The company maintains on hand one month’s worth of supplies. 10. The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount borrowed and pay off any loans as soon as possible. 11. Cash on hand

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