Question
29 . The Amber Magic Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X9 to be as follows: Sales
29. The Amber Magic Shoppe has forecast its sales revenues and purchases for the last 5 months of 20X9 to be as follows:
| Sales | Purchases |
August | $25,000 | $17,000 |
September | 15,000 | 19,5000 |
October | 25,000 | 29,000 |
November | 30,000 | 20,000 |
December | 26,000 | 24,000 |
30. Follies Bookstore, the only bookstore close to campus, had net income in 20X5 of $90,000. Here are some of the financial ratios from the annual report.
Profit Margin | 12% |
Return on Investment | 20% |
Debt to Asset Ratio | 55% |
Using these ratios, calculate the following for Follies Bookstore: A) Sales B) Total assets C) Total asset turnover D) Total debt E) Shareholders' equity F) Return on equity
65% of sales are on credit. On the basis of past experience, 50% of the accounts receivable are collected the month after the sale and the remainder are collected 2 months after the sale. Purchases are paid 30 days after they are incurred. The firm had a cash balance of $5,000 as of September 30th, and its minimum required cash balance is $4,000. It had no beginning loan balance. Prepare a cash budget for October, November and December.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started