| 1. Create income statement, balance sheet, and statement of cash flow from following information. |
| 2. What recommendation should be made to the controller? |
|
|
|
|
|
|
|
January |
February |
March |
| Sales |
$450,000 |
$550,000 |
$700,000 |
| Manufacturing costs |
$260,000 |
$330,000 |
$420,000 |
| Selling and administrative expenses |
$100,000 |
$140,000 |
$45,000 |
| Capital expenditures |
- |
- |
- |
|
|
|
|
| Cash Budget |
January |
February |
March |
| Cash sales |
$9,000 |
$11,000 |
$14,000 |
| Collections form account receivable |
$23,000 |
$33,000 |
$42,000 |
| Dividends |
$2,000 |
|
|
| Total Cash Receipts |
$34,000 |
$44,000 |
$56,000 |
|
|
|
|
| Estimated cash payments |
|
|
|
| Manufacturing costs |
($216,000) |
($283,000) |
($371,000) |
| Selling and administrative expenses |
($100,000) |
($140,000) |
($150,000) |
| Capital expenditures |
|
|
($45,000) |
| Note payable including interest |
|
|
($51,000) |
| Income tax |
|
($15,000) |
|
| Dividend |
|
|
($5,000) |
| Total Cash Payments |
($316,000) |
($438,000) |
($622,000) |
|
|
|
|
| Cash increase (decrease) |
$2,400 |
$200 |
($6,200) |
| Cash balance beginning |
$4,500 |
$6,900 |
$7,100 |
| Cash balance ending |
$6,900 |
$7,100 |
$900 |
| Maximum cash balance |
$3,500 |
$3,500 |
$3,500 |
| Excess (Deficiency) |
$3,400 |
$3,600 |
($2,600) |
|
|
|
|
| Current assets |
January 1 |
|
|
| Cash |
$45,000 |
|
|
| Marketable securities |
$65,000 |
|
|
| Accounts receivable |
$290,000 |
|
|
|
$400,000 |
|
|
|
|
|
|
| Current liabilities |
|
|
|
| Notes payable |
$50,000 |
|
|
| Accounts payable |
$18,000 |
|
|
|
|
|
|
|
|
|
|
| Dividend recorded in January |
$20,000 |
|
|
| Tax payment in February |
$15,000 |
|
|
| Dividend payment in February |
$5,000 |
|
|
| Minimum cash balance |
$35,000 |
|
|
|
|
|
|
| Collections |
January |
February |
March |
| November sales |
$50,000 |
|
|
| December sales |
$180,000 |
$60,000 |
|
| January sales |
$90,000 |
$27,000 |
$90,000 |
| February sales |
|
$110,000 |
$330,000 |
| March sales |
|
|
$140,000 |
| Total collections |
$320,000 |
$440,000 |
$560,000 |
| Cash collections |
$90,000 |
$110,000 |
$140,000 |
| Cash from receivables |
$230,000 |
$330,000 |
$420,000 |
|
|
|
|
| Manufacturing costs |
$260,000 |
$330,000 |
$420,000 |
| Depreciation, insurance, & property tax |
$40,000 |
$40,000 |
$40,000 |
| Net manufacturing costs |
$220,000 |
$290,000 |
$380,000 |
| December costs |
$18,000 |
|
|
| January costs |
$198,000 |
$22,000 |
|
| February costs |
|
$261,000 |
$29,000 |
| March costs |
|
|
$34,200 |
| Total manufacturing payments |
$216,000 |
$283,000 |
$371,000 |