Ellen Eglin, assistant controller, has been given responsibility for formulating the cash flow projections, a critical element during a period of rapid expansion. The following information will be used in preparing the cash analysis:
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- Abeng Corp, a rapidly-expanding crossbow distributor, is in the process of formulating plans for James Chambers, director of marketing, has completed his 2021
forecast and is confident that sales estimates will be met or exceeded. The following forecasted sales figures show the growth expected and will provide the planning basis for other corporate departments:
|
Month |
Sales (units) |
Month |
Sales (units) |
|
January |
7,200 |
July |
12,000 |
|
February |
8,000 |
August |
11,000 |
|
March |
7,200 |
September |
12,800 |
|
April |
8,800 |
October |
13,600 |
|
May |
10,000 |
November |
12,000 |
|
June |
11,200 |
December |
14,000 |
Ellen Eglin, assistant controller, has been given responsibility for formulating the cash flow
projections, a critical element during a period of rapid expansion. The following information will be used in preparing the cash analysis:
- Bows are sold at an average price of $150.
- Abeng has experienced an excellent record in
accounts receivable collection and expects this trend to The company collects 30% of its billings in the month of sales, 50% in the first month following sale and the balance in the second month after sale.
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- Abeng Corp, a rapidly-expanding crossbow distributor, is in the process of formulating plans for James Chambers, director of marketing, has completed his 2021 forecast and is confident that sales estimates will be met or exceeded. The following forecasted sales figures show the growth expected and will provide the planning basis for other corporate departments: Month Sales (units) Month Sales (units) January 7,200 July 12,000 February 8,000 August 11,000 March 7,200 September 12,800 April 8,800 October 13,600 May 10,000 November 12,000 June 11,200 December 14,000 Ellen Eglin, assistant controller, has been given responsibility for formulating the cash flow projections, a critical element during a period of rapid expansion. The following information will be used in preparing the cash analysis: Bows are sold at an average price of $150. Abeng has experienced an excellent record in accounts receivable collection…Abeng Corp, a rapidly-expanding crossbow distributor, is in the process of formulating plans for James Chambers, director of marketing, has completed his 2021 forecast and is confident that sales estimates will be met or exceeded. The following forecasted sales figures show the growth expected and will provide the planning basis for other corporate departments: Month Sales (units) Month Sales (units) January 7,200 July 12,000 February 8,000 August 11,000 March 7,200 September 12,800 April 8,800 October 13,600 May 10,000 November 12,000 June 11,200 December 14,000 Ellen Eglin, assistant controller, has been given responsibility for formulating the cash flow projections, a critical element during a period of rapid expansion. The following information will be used in preparing the cash analysis: Bows are sold at an average price of $150. Abeng has experienced an excellent record in accounts receivable collection…Toronto Business Associates, a division of Maple Leaf Services Corporation, offers management and computer consulting services to clients throughout Canada and the northwestern United States. The division specializes in website development and other Internet applications. The corporate management at Maple Leaf Services is pleased with the performance of Toronto Business Associates for the first nine months of the current year and has recommended that the division manager, Richard Howell, submit a revised forecast for the remaining quarter, as the division has exceeded the annual plan year-to-date by 20 percent of operating income. An unexpected increase in billed hour volume over the original plan is the main reason for this increase in income. The original operating budget for the first three quarters for Toronto Business Associates follows. TORONTO BUSINESS ASSOCIATES 20x1 Operating Budget 1st Quarter 2nd Quarter 3rd Quarter Total for FirstThree Quarters Revenue:…
- The figures in the table below relate to HM Sdn Bhd which is seeking your advice on its financial position. 2020 2021 Expected Results Budgets November (RM) December (RM) January (RM) February (RM) March (RM) April (RM) Sales 60,000 70,000 72,000 66,000 60,000 68,000 Materials 30,000 35,000 36,000 33,000 30,000 34,000 Direct Labour 12,000 14,000 14,400 13,200 12,000 13,600 Overheads 12,600 14,700 15,200 13,800 12,700 14,300 TOTAL COSTS 54,600 63,700 65,600 60,000 54,700 61,900 NET PROFITS 5,400 6,300 6,400 6,000 5,300 6,100 You are provided with the following additional information: Each month consists of four weeks. 20% of sales are for cash, and 80% on credit. Half the credit customers pay in the month following the month of the sale and the balance two months later. All purchases are on credit and are paid for in the month following the month of the purchase after first deducting a 5% cash discount. Wages are paid one week in arrears. Overheads which include RM2,500 for…Which of the following would normally be considered in a strategic plan? a. setting a target of 12 percent return on sales b. maintaining the image of the company as the industry leader c. setting a market price per share of stock outstanding d. distributing monthly reports for departmental variance analysis e. tightening credit terms for customers to 2/10, n/30The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):1st Quarter 2nd Quarter 3rd Quarter 4th QuarterBudgeted unit sales ............................ 11,000 12,000 14,000 13,000The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of salesin the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to beuncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in thefi rst quarter, is $70,200.The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.Required:1. Prepare the company’s sales budget and schedule of expected cash…
- Based on this table below write a business memo addressed to the president recommending the best course of action based on your analysis. In your memo, discuss changes in break-even points, and impacts to the operating leverage. Including a table summarizing your findings would be appropriate. The company’s long-range plan is to grow sales to 250,000 units in the next two to three years. In your memo, summarize the advantages and disadvantages of each of the alternatives. Critically evaluate the alternatives based on current market conditions and any impact each alternative may have on the long-range plan. Write a business memo addressed to the president recommending the best course of action based on your analysis. In your memo, discuss changes in break-even points, and impacts to the operating leverage. Including a table summarizing your findings would be appropriate. The company’s long-range plan is to grow sales to 250,000 units in the next two to three years. In your memo,…The management accountant at Genus Manufacturing Company, Karen Cranston, is in the processof preparing the cash budget for the business for the second quarter of 2020. Extracts from the salesand purchases budgets are as follows:Month2020CashSalesSalesOnAccountPurchasesOnAccountFebruary $45,000 $480,000 $390,000March $60,000 $600,000 $360,000April $48,700 $720,000 $450,000May $97,400 $640,000 $400,000June $151,000 $800,000 $500,000i) An analysis of the records shows that trade receivables (accounts receivable) are settledaccording to the following credit pattern, in accordance with the credit terms 5/30, n90:50% in the month of sale30% in the first month following the sale20% in the second month following the saleii) Accounts payable are settled as follows:60% in the month in which the inventory is purchased40% in the following monthThe credit terms of the suppliers - 4/30, n60.iii) Computer Equipment costing $280,000 will be purchased and paid for in June 2020.iv) During June, the…Upon receipt of the budget, the team manager, Hilux James, has now informed you that, in keeping with industry players, the management of Toyota & Sons have indicated an industry requirement to maintain a minimum cash balance of $155,000 each month. He has also noted that management is very keen on keeping the gearing ratio of the business as low as possible and would therefore prefer to cushion any gaps internally using equity financing. Based on the budget prepared, will the business be achieving this desired target? Suggest three (3) internal strategies that may be employed by management to improve the organization’s monthly cash flow and militate against or reduce any possible shortfall reflected in the budget prepared. Each strategy must be fully explained.
- Universal Electric Company is a small, rapidly growing wholesaler of consumerelectrical products. The firm’s main product lines are small kitchen appliances andpower tools. Marcia Wilcox, Universal’s general manager of marketing, has recentlycompleted a sales forecast. She believes that the company’s sales during the first quarterof next year will increase by 10 per cent each month over the previous month’s sales.Wilcox then expects sales to remain constant for several months. Universal’s projectedbalance sheet as at 31 December this year is as follows:Cash $ 35 000Accounts receivable 270 000Marketable securities 15 000Inventory 154 000Buildings and equipment (net of acc. depr.) 626 000Total assets $1 100 000Accounts payable $176 400Long-term loan interest payable 12 500Property taxes payable 3 600Long-term loan payable (10% p.a.) 300 000Share capital 500 000Retained earnings 107 500Total liabilities and shareholders’ equity $1 100 000Jack Hanson, the assistant accountant, is now…Universal Electric Company is a small, rapidly growing wholesaler of consumerelectrical products. The firm’s main product lines are small kitchen appliances andpower tools. Marcia Wilcox, Universal’s general manager of marketing, has recentlycompleted a sales forecast. She believes that the company’s sales during the first quarterof next year will increase by 10 per cent each month over the previous month’s sales.Wilcox then expects sales to remain constant for several months. Universal’s projectedbalance sheet as at 31 December this year is as follows:Cash $ 35 000Accounts receivable 270 000Marketable securities 15 000Inventory 154 000Buildings and equipment (net of acc. depr.) 626 000Total assets $1 100 000Accounts payable $176 400Long-term loan interest payable 12 500Property taxes payable 3 600Long-term loan payable (10% p.a.) 300 000Share capital 500 000Retained earnings 107 500Total liabilities and shareholders’ equity $1 100 000Jack Hanson, the assistant accountant, is now…he marketing department of XYZ Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): Activity Cost Pool (Activity Measure) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 9000 10000 11000 12000 The selling price of the company’s product is $19.00 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $65,800. The company expects to start the first quarter with 1,350 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,900 units. Required:1. Calculate the estimated sales…
