Clean Enterprise Limited2021JanuaryS'0005,00012,00018,0005,000202020212021MarchS'00010,00026,00010,0007,0004001,000100DecemberFebruaryS'0006,00010,000000.SCash sales12,00030,00040,0005,0005001,000Credit salesCredit purchasesSalaries40,0005,0003001,000Utilities300DepreciationProperty taxesInsurance1,0003,000AdvertisingStatutory deductionsOther expenses5001003001,5001,8001,5001002,100200300100Additional information:1. Collection from credit customers are normally 60% in the month of sale,30% in the month following sale and the balance of 10% in the secondmonth following sale.2. The credit sale for November 2020 was $14,000,000.3. Including in the November 2020 credit sales is a credit sale to Hard LuckLimited. The company (Hard Luck Limited) purchased $100,000 goods onNovember 1, 2020. A notice in the newspaper on November 6, 2020indicated that a loan creditor of the company had placed the company intoreceivership.4. Credit purchases are paid for in the month following purchase.5. The company is expected to invest $12,000,000 on fixed deposit for sixmonths on December 1, 2020. The company will receive a 5% rate ofretum per annm The interest income will be received on a monthly basis.6. A bonus of 2 % of total sales for December 2020 will be paid to staffmembers in January 2021.7. Salaries, utilities, property taxes, insurance, advertising and other expetisesare paid in the month incurred. 8. Financial institutions charge no penalty for paying a loan before the duedate. Financial institutions will charge a penalty of $5,000 if a companyliquidates its investment early.9. Statutory deductions are paid for in the month following the payrolldeductions. Corporation tax for 2021 is estimated at $1,200,000 and isnormally paid on a quarterly basis. The first payment is normally made onMarch 31.10. The expected closing cash and bank balance on December 31, 2020 isexpected to be $8,000,000.11. The company wants to purchase computer equipment costing $8,000,000in March 2021 and wants to obtain an overdraft to purchase the computerequipment. The computer equipment is expected to last for 4 years. Thecompany will also need to purchase software in March 2021 at a cost ofS1,000,000. No funds have been identified to purchase the software.12. The company's Statement of Financial Position reveals a loan amountingto $4,000,000 at an interest rate of 10% per annum. The interest is paidquarterly on March 31, June 30, September 30, and December 31. Theloan is to be repaid on February 28, 2021. The company pays the intereston a monthly basis.Required:(1)Assume that you are employed by the company. What recommendationswould you make to the management team of the company?Prepare the revised cash budget for the quarter ending March 31, 2021incorporating any relevant recommendation(s) you made in (1) above.(2)

Answered: S'000 12,000 S'000 5,000 12,000 18,000…

S'000 12,000 S'000 5,000 12,000 18,000 5,000 300 1,000 S'000 6,000 10,000 40,000 5,000 S'000 10,000 26,000 10,000 7,000 30,000 40,000 5,000 500 300 400 1,000 1,000 1,000 100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Erie Company reports the following comparative balance sheets and income statement information for the current year. All revenues are from credit sales. Comparative Balance Sheets Assets Cash Accounts receivable Prepaid insurance Inventory Property, plant & equipment Total Assets Liabilities and Stockholder's Equity Accounts payable Salaries payable Long-term notes payable Common stock Retained earnings Total Liabilities and Stockholders' Equity Income Statement Revenue Cost of goods sold Gross margin Operating expenses Net income $ What was the cash received from customers during the year? $ 290,000 (162,000) 128,000 (82,000) 46,000 Beginning of Year $ 90,000 34,000 34,000 10,000 42,000 $ 210,000 $ 50,000 18,000 26,000 22,000 94,000 $ 210,000 End of Year $ 50,000 18,000 42,000 26,000 50,000 $ 186,000 $ 34,000 42,000 34,000 22,000 54,000 $ 186,000
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4G llll 4:33 XB/S 4GI 4 73 0.40 E ACCC - Disimpan 1, PREPARE THE TRIAL BALANCE ACCOUNTT TITLE Balance account payable 60,000 Account receivable 65000 Bank 40,000 Сapital 170,000 Cash 2,000 Comission paid 4300 Comission received 1,500 Discount Allowed 2300 Discount Received 3,500 Donations 500 Drawings 500 Fixture and Fittings 35000 Freight inwards 1000 Freight outward 1400 General Expenses 2300 Insurance premium 3600 Interest received on investment 5,000 Land and building 80000 Loan from Mbb 67500 opening inventory 1 JAN 2019 26000 Patent 50000 Printing and stationery 700 Purchases 65000 Rates and taxes 3200 Rental paid 4000 Rental revenue 3,000 Return inwards 1500 Returns Outwars 1,800 Sales 88,000 Wages and salaries 12000 * CLOSING INVENTORY 31 DECEMBER 2019 7,000