Name ___________________ Hickman Avionic's actual sales and purchases for April and May are Show here along with forecasted sales and purchases for June through September Sales $410,000 400000 380000 360000 390000 420000 Purchases 220000 210000 200000 250000 300000 220000
Case
Hickman
April (actual) May (actual) June (forecast) July(forecast) August(forecast) September (forecast)
The co makes 10% of sales for cash and 90% on credit. 2% of the credit sales are never collected (this would be split in the same ratio as collections, 20% and 80%) Of credit sales, 20% are collected month after sale, and 80% 2 months after sales Purchases are paid 40% in month after purchase, and 60% 2 months later Note that a 2% discount is taken on
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What is the accounts receivable balance on Sept 30 (include only net amount to be paid)? Total Sales: $2,360,000.00 Total Reciept $1,671,896.00 Accounts Receivable balanc $688,104.00 e. What are each the short term loan and marketable security balances on Sept 30? f. What is balance of accounts payable on Sept 30 (include only net amount to be paid)? g. calculate DSO and DPO DSO = Accounts Recievable / (total sales / 182 days) DSO = 688104 / (2360000 / 182) DSO = DPO = Accounts Payable / (6 months payable / 182) DPO = 398240 / (1400000/ 182) DPO =
securities :
$ 35,608.00 Loans: $
Of the total sales indicated, only 10 percent were expected to be for cash. Collections on the remainder were anticipated generally within 60 days of sale. In particular, recent experience had suggested that roughly one-half of credit sales were collected for during the month following the month of sale and that other one-half during the next subsequent month. Mr. Firr intended to use this pattern as the basis for his calculations.
(TCO A) Construct a balance sheet from the following information. Be sure the format is correct. (Show all work.) Cash on hand 1,000 Bank credit
-In 1984, there was a switch from accelerated to straight line depreciation retroactively. Because of this, the depreciation expense decreased.
* Our company’s sales forecast has been based on performance from previous years along with market circumstances. We are looking at the future of the business objectively which we then can evaluate past to
For this assignment, purchase and read the case file “Harnischfeger Corp.” You can purchase the reading from Harvard Business Publishing Web site. After reading the case, answer the questions on page three of this document. Submit your assignment by the end of Week 2.
This past legislative session saw a major win for the wrongly convicted with H.B. 48. H.B. 48 creates a commission to review convictions after exoneration and aims to prevent wrongful conviction. This bill is a supported across the political spectrum on the part of author Ruth Jones McClendon (D) and Sen. Rodney Ellis (D) along with joint authors Rep. Jeff Leach (R), Rep. David Simpson (R), Rep. Abel Herrero (D), Rep. Joe Moody (D) and The Texas Public Policy Foundation’s Center for Effective Justice.
Question 3: Describe and show the journal entries illustrating how the company accounts for the transfer of its accounts receivable to financial institutions. Is this accounting treatment reasonable? What are the key assumptions made under this approach? Do you agree with these assumptions?
2. Forecast the firm’s financial statements for 2002 and 2003. What will be the external financing requirements of the firm in those years? Can the firm repay its loan within a reasonable period? In order to forecast the financial statements of 2002 and 2003, the following assumptions need to be made. The growth of sales is 15%, same as 2001, which is estimated by managers. The rate of production costs and expenses per sales is constant to 50%. Administration and selling expenses is the average of last 4 years. The depreciation is $7.8 million per year, which is calculated by $54.6 million divided by 7 years. Tax rate is 24.5%, which is provided. The dividend is $2 million per year only when the company makes profits. Therefore, we assume that there will be no dividend in 2003. Gross PPE will be $27.3 million (54.6/2) per year. We also assume there is no more long term debt, because any funds need in the case are short term debt, it keeps at $18.2 million. According to the forecast, Star River needs external financing approximately $94 million and $107 million in 2002 and 2003, respectively. In order to analysis if the company can repay the debt, we need to know the interest coverage ratio, current ratio and D/E ratio. The interest coverage ratios through the forecast were 1.23 and 0.87 respectively, which is the danger signal to the managers, because in 2003, the profits even not
31, 2004) was computed, then the total Accounts Receivable balance would be $4,578,008.14. This indicates
Credit limits are set to manage the spending of their customers, this way Office Products Depot can ensure that customers aren’t purchasing too many goods. This means that if the customer is unable to pay their account Office Products Depot loses say $2000 (a company’s credit limit) rather than $10000. To set these credit limits, Office Products Depot estimates the amount of money they estimate the customer will spend over a two month period. This number is then rounded to the nearest $500 to make recording credit limits easier. Customer payment of money owed is managed by the same salesperson that the customer first dealt with, as they receive commission based on money received by their particular customers. The salesperson is often in direct contact with the customer to make sure the credit is being paid off. However, sometimes the credit limit of a particular customer can be increased, if they have paid well in the past. An example of this is Jones Stationery, who is $300 over their credit limit. When Office Products Depot sends invoices to their customers, they send a separate tax invoice for each provided service. This makes the customer more aware of the each individual charge. Monthly statements are also sent out aswell. Refunds and reductions are also given occasionally to customers, to maintain a good relationship, and fix incorrectly recorded charges. An example of this Office Products Depot
What, if anything, is Hurwitz the older concert promoter compromising to get ahead? Is there an ethical objection that could be raised here? If so, what? If not, why not?
b. What is the total balance of Jessie Robinson 's revolving account? (0.5 points) N/A
The main problem of the company is that it couldn’t liquidate a seasonal working capital loan for the requisite 30 days each year. It reflects the company doesn’t have sufficient cash and they need more loan but the bank is reluctant to give any unless the company can give a reliable financial plan to show they can pay off their loan by the end of 2012. So, Mr Malik came up with a financial forecast for the month to month operation to gain the bank’s trust. Sadly, the forecast portrays it cannot afford to pay off its debt by end of 2012 and would owe a balance of IND 3,858.00. This
1. Sales forecast – (at $ 30 retail price with the assumption of $15 whole sale price)
a) What would the receivables level be at the end of March and at the end of June?