Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process.
|Unit sales for November 2019||112,000|
|Unit sales for December 2019||102,000|
|Expected unit sales for January 2020||114,000|
|Expected unit sales for February 2020||114,000|
|Expected unit sales for March 2020||116,000|
|Expected unit sales for April 2020||126,000|
|Expected unit sales for May 2020||136,000|
|Unit selling price||$12|
Waterways likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $183,600.
Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit.
Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,400 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $103,740.
|Labor requires 12 minutes per unit for completion and is paid at a rate of $6 per hour.|
|Indirect materials||30¢||per labor hour|
|Indirect labor||50¢||per labor hour|
|Utilities||40¢||per labor hour|
|Maintenance||30¢||per labor hour|
|Property taxes||$2,900||per month|
|Selling and Administrative|
|Variable selling and administrative cost per unit is $1.60.|
|Other fixed costs||$3,100||a month|
The Cash balance on December 31, 2019, totaled $103,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.30 per share for 4,800 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 6% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $520,000 equipment purchase is planned for February.
For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to 0 decimal places, e.g. 2,520.)
Schedule of Expected Cash Payments for Purchases
|Accounts payable, 12/31/19||
Once the production units are computed, the raw material purchases in pounds are determined. The purchase value of raw materials is determined by multiplying the quantity wi...
Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*See Solution
Q: I need help solving this problem. The picture attached is the information which was given. I copy an...
A: Income Statement: It includes the total cost incurred by the business and revenue earned by the busi...
Q: for each of the 5 transation, state whether the transaction represented revenue to the firm during ...
A: Revenue transactions mean the transactions which are incidental to the operational activities of the...
Q: MC issued $5million of 20-year, 9.5 percent bonds on July 1, 2018, at 98. Interest is due on June 30...
A: Journal entry: Journal entry is book of original entry used to record the economic event and transac...
Q: I understand the accounting equation is: Liabilities + Stock Holders’ Equity = Assets How do you pre...
A: The basic Accounting Equation is Assets = Equity + LiabilitiesAssets are the resources owned by the...
Q: Ramos Co. provides the following sales forecast and production budget for the next four months: ...
A: Budget:Budget refers to the financial plan for the business activities a company intends to do in th...
Q: Why is it necessary to prepare formal financial statements if all the data are in the statement colu...
A: Worksheet is an accounting tool used by the business which is used for balancing and closing the b...
Q: Shown below are comparative balance sheets for Sandhill Company. Sandhill CompanyComparative Bal...
A: Cash Flow Statements Cash flow statement provides information regarding cash generated or used durin...
Q: In October 2018, Ben and Jerry exchange investment realty in a § 1031 like-kind exchange. Ben bought...
A: The holding period for Ben's reality received from Jerry begin from 2007 because the holding period ...
Q: Adama Company incurred the following costs.Indicate to which account Adama would debit each of the c...
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...