Answer Happy

A. The company sells each system for $190. Actual sales for
November were 100 units. It is expected that sales will increase by
5% per month until May 2022.
B. 70% of the cash for sales is collected in the month of sale,
20% is collected in the following month, and the remaining 10% is
collected in the month after that. For simplicity, all sales taxes
will be ignored.
C. The company purchases enough units each month to cover the
current month’s sales and maintain an ending inventory equal to 60%
of the following month’s projected sales. Each unit costs the
company $105. Inventory purchases are paid for in the month
following the purchase.
D. The company is expected to incur fixed operating expenses of
$1,200 per month and variable operating expenses equal to 10% of
sales for the month. Operating expenses are paid for in the month
incurred.
E. Monthly interest is paid on the long-term loan at a rate of
5% per annum. At the end of March, a payment of $500 will be made
on the principal of the loan.
F. On August 1, 2021, the company paid $7,200 for one year’s
insurance coverage.
G. Equipment costing $3,000 will be purchased and paid for at
the beginning of January. All equipment is depreciated on a
straight-line basis over 15 years with no residual value. H. The
company will issue 100 additional common shares and sell them to
your uncle for $10.00 per share at the end of March 2022.
I. The company pays salaries totalling $4,000 each month. For
simplicity, ignore all payroll tax implications.
J. The company will declare and pay a dividend of $3,000 at the
beginning of March 2022.
K. Income tax expense for this small business is calculated at
25% of the earnings before taxes. The company pays income tax
instalments of $500 per month.
L. The company must maintain a minimum cash balance of $4,000. A
short-term loan is available to cover any shortfall. Interest is
paid monthly on the previous month's loan balance at a rate of 6%
per annum. Any cash above $4,000 available at month end is used to
reduce any existing short-term loan.
Required: Use Microsoft Excel to complete this assignment. Each
student is to create his/her own file from scratch, and complete
the assignment individually. Use formulas wherever possible. The
spreadsheet should be formatted to show amounts to the nearest
dollar (no cents).
The items in the budget should appear in the following
order:
1. The balance sheet for December 31, 2021 (as given above).
2. A cash receipts schedule for January, February and March.
Hint: use the given percentages, with the Round function (explained
below), to avoid a rounding error. Check figure: Cash receipts for
January should be $20,520.
3. A purchases schedule in units for January, February and
March. Check figure: January purchases should be 114 units.
4. A cash payments schedule for January, February and March.
Check figure: January’s total cash payments should be $22,157.
5. A cash budget for January, February and March, including a
calculation of cumulative loan at the bottom. Check figure: At the
end of January the cash balance should be $4,000 and the cumulative
loan should be $2,837.
6. The pro-forma income statements for January, February and
March with a fourth column for totals. Subtotals for EBIT and EBT
should be included. List all expenses separately (do not combine)
and show long-term and short-term interest separately. Hint: Cost
of goods sold is not the same thing as purchases. Check figure:
January’s earnings after taxes should be $1,029
7. A pro-forma retained earnings schedule for the quarter ended
March 31 (not for each month). Check figure: Ending retained
earnings should be $2,547.
8. A pro-forma balance sheet at March 31. You do not have to
complete balance sheets for January or February. Hints: Consider
what will cause balances to change from the December 31, 2021
balance sheet. Prepaid insurance will be the opening amount less
the amount expensed on the income statement. Tax payable will be
the opening balance plus total tax expense less total tax
instalments. Check figure: Total assets should be $31,460.
Anyone who will answer will get 25 CAD from my side.
You are the sole shareholder and operator of a small incorporated business that purchases compact global positioning systems (GPS) and sells them to retailers. The following data have been assembled to assist in the preparation of the master budget for the first quarter (January, February and March) of 2022. As of December 31, 2021 your company had the following balance sheet: Your Company (make up a name) Balance Sheet December 31, 2021 Cash Accounts receivable Inventory Prepaid insurance Total current assets Equipment Accumulated depreciation Net equipment Total assets $ 4,000 7,885 6,930 4,200 23,015 8,000 3.000 5,000 $ 28,015 Accounts payable $ 11,340 Taxes payable 900 ST loan payable 1,200 Total current liabilities 13,440 LT loan payable 5,000 Total liabilities 18,440 Common shares 8,000 Retained earnings 1,575 Total liabilities and equity $ 28,015 * 1,000 common shares outstanding A. The company sells each system for $190. Actual sales for November were 100 units. It is expected that sales will increase by 5% per month until May 2022. B. 70% of the cash for sales is collected in the month of sale, 20% is collected in the following month, and the remaining 10% is collected in the month after that. For simplicity, all sales taxes will be ignored. C. The company purchases enough units each month to cover the current month's sales and maintain an ending inventory equal to 60% of the following month's projected sales. Each unit costs the company $105. Inventory purchases are paid for in the month following the purchase.