2. (Short-Term Financial Planning) The PDC Company was described earlier in this chapter. Refer to the PDC Company's projected monthly operating schedules in Ta. ble 6.2. PDC's sales are projected to be $80,000 in September 2011. A. Prepare PDC's projected income statement for August. B. Prepare PDC's projected balance sheet for August C. Prepare PDC's projected statement of cash flow for August. D. Compare your balance sheet at the end of August with the balance sheet in Table 6.1 and apply the balance sheet method to determine cash flows over the March August period. ARCH APRIL JUNE JULY AUGUST Schedule 1: Sales 92,000 562.000 Credit sales, 40% Cash sales 60% 92,000 36.800 56,200 115,000 46,000 68,000 184,000 73,600 110,400 138,000 55,200 82,800 115,000 46,000 69,000 69,000 110,400 82.800 Schedule 2 Cash Collections Cash sales this month 100% of last month's Credit sales Total collections 69.000 36.800 45.000 156.400 73,600 156,400 55.200 124.200 105.800 (B) PURCHASES SCHEDULE APRIL TO MARCH APRIL MAY JUNE JULY Schedule 3. Purchases Ending inventory 110,400 149,040 123.280 110,400 97,520 Cost of goods sold Totalreded Beginning inventory Purchases 64,400 174,800 97,520 77.280 80.500 229,540 - 10,400 119,140 128 800 252.080 -9040 103,040 96.600 207,000 -23,280 83,720 80,500 178,020 - 10,400 STA520 38,640 59,570 51,520 Schedule 4: Purchase Disbursements 50% of last month's purchases 50% of this month's purchases Disbursements for purchases 4 1,860 59.570 51520 33 810 98210 111.090 E30 75.670 (C) WAGES AND COMMISSIONS SCHEDULE APRIL TO MARCH APRIL MAY JUNE JULY Schedule 5. Wages and Commissions 5250 5.250 5750 17250 TO 226 / 692 MARCH APRIL MAY JUNE JULY Dibunements ions 9,775 11,500 16,675 13,225 50% of last month's expenses 50% of this month's expenses Total 11,500 21,275 16,675 28,175 13,225 29,900 11,500 24,725 APRIL 23,000 (D) CASH BUDGET MAY JUNE 23,000 23,000 JULY 23,000 105.800 156,400 156.400 124200 Seginning cash balance ash receipts Collections from customers otal cash available for Seeds before financing Cash disbursements: Merchandise Wages and commissions 128,800 179.400 179,400 147,200 98,210 111,090 93,380 75.670 21,275 28,175 29,900 24,725 Miscellaneous expenses 5,750 9.200 6.900 5,750 4.600 4.600 4600 Truck purchase Total disbursements 4,600 6.900 136,735 153,065 134,780 110.745 23,000 balance desired Total cash needed sh 23.000 159.235 30 935 23.000 176 065 30.935 805 3003 $0.935 23001 2 2. (Short-Term Financial Planning) The PDC Company was described earlier in this chapter. Refer to the PDC Company's projected monthly operating schedules in Ta. ble 6.2. PDC's sales are projected to be $80,000 in September 2011. A. Prepare PDC's projected income statement for August. B. Prepare PDC's projected balance sheet for August C. Prepare PDC's projected statement of cash flow for August. D. Compare your balance sheet at the end of August with the balance sheet in Table 6.1 and apply the balance sheet method to determine cash flows over the March August period. ARCH APRIL JUNE JULY AUGUST Schedule 1: Sales 92,000 562.000 Credit sales, 40% Cash sales 60% 92,000 36.800 56,200 115,000 46,000 68,000 184,000 73,600 110,400 138,000 55,200 82,800 115,000 46,000 69,000 69,000 110,400 82.800 Schedule 2 Cash Collections Cash sales this month 100% of last month's Credit sales Total collections 69.000 36.800 45.000 156.400 73,600 156,400 55.200 124.200 105.800 (B) PURCHASES SCHEDULE APRIL TO MARCH APRIL MAY JUNE JULY Schedule 3. Purchases Ending inventory 110,400 149,040 123.280 110,400 97,520 Cost of goods sold Totalreded Beginning inventory Purchases 64,400 174,800 97,520 77.280 80.500 229,540 - 10,400 119,140 128 800 252.080 -9040 103,040 96.600 207,000 -23,280 83,720 80,500 178,020 - 10,400 STA520 38,640 59,570 51,520 Schedule 4: Purchase Disbursements 50% of last month's purchases 50% of this month's purchases Disbursements for purchases 4 1,860 59.570 51520 33 810 98210 111.090 E30 75.670 (C) WAGES AND COMMISSIONS SCHEDULE APRIL TO MARCH APRIL MAY JUNE JULY Schedule 5. Wages and Commissions 5250 5.250 5750 17250 TO 226 / 692 MARCH APRIL MAY JUNE JULY Dibunements ions 9,775 11,500 16,675 13,225 50% of last month's expenses 50% of this month's expenses Total 11,500 21,275 16,675 28,175 13,225 29,900 11,500 24,725 APRIL 23,000 (D) CASH BUDGET MAY JUNE 23,000 23,000 JULY 23,000 105.800 156,400 156.400 124200 Seginning cash balance ash receipts Collections from customers otal cash available for Seeds before financing Cash disbursements: Merchandise Wages and commissions 128,800 179.400 179,400 147,200 98,210 111,090 93,380 75.670 21,275 28,175 29,900 24,725 Miscellaneous expenses 5,750 9.200 6.900 5,750 4.600 4.600 4600 Truck purchase Total disbursements 4,600 6.900 136,735 153,065 134,780 110.745 23,000 balance desired Total cash needed sh 23.000 159.235 30 935 23.000 176 065 30.935 805 3003 $0.935 23001 2
