2.Using the revised year one budget schedules and financial statements, comment on the differences between the originally budgeted information under constant demand prepared in part two and the revised budgeted cash budget, income statement and balance sheet provided. Have dramatic changes occurred in predicted profit, financial position, and cash flows and if so, what are the primary causes of these changes? Discuss the major differences in beginning of year projections and mid-year projections now that actual data is available for the first two quarters. Hint: you may want to calculate percentage of change in items on the cash budget, income statement and balance sheet (horizontal rate of change) comparing the original budget to the mid-year revised budget. (question should be answered in paragraph form)
Cash Budget
Income Budget
Balance sheet
Water Play, Inc. Revised Cash Budget December 31, 20XX S Q1 Q2 25,000,000 $ 25,000,000 $ 221,100,000 428,850,000 246.100.000 453.850.000 Q3 25,000,000 $ 517,800,000 542.800.000 Q4 Year 86,384,310 S 25,000,000 537,300,000 1,705.050,000 623.684,310 1.730.050,000 25,000,000 1,973,700,000 1,998.700.000 0.0% -13.6% -13.4% Beginning cash balance Cash collections Cash available Disbursements: Material purchases Direct labor Manufacturing overhead Selling and administrative Total disbursements Excess or (Deficiency) Financing section: Borrowings Repayments Interest on long-term note Interest on short-term borrowing Financing total Ending cash balance 51,353,190 30,327,566 102.271,784 120,348,125 304,300,665 (58,200,665) 108,933,120 46.462.487 139.858,498 131,270,750 426,524.854 27,325,146 131,313,690 52.002,000 136,250,000 133,100,000 452,665,690 90,134,310 135,000,000 52.002,000 136,250,000 133,100,000 456,352.000 167,332,310 426,600,000 180,794.053 514,630,282 517,818,875 1,639,843.210 90,206,790 490,050,000 208,008,000 545,000,000 532,400,000 1,775,458.000 223.242.000 -12.9% -13.1% -5.6% -2.7% -7.6% -59.6% 86.950,665 1.424.854 (3,750,000) (3,750,000) (88,375,520) (3,750,000) (3,750,000) (8,588.202) (3,750,000) (100.713,722) 86,384,310 S 66,618,588 S 88,375,520 (88,375,520) (15,000,000) (8,588.202) (23,588,202) 66,618,588 48.352.000 82.8% (48,352,000) 82.8% (15,000,000) 0.0% (4.835.200) 77.6% (19,835,200) 18.9% 203,406,800 -67.2% 83,200,665 (2.325.146) 25,000,000 $25,000,000 $ S Sign in Press esc to exit full screen File Home Insert Draw Page Layout Formulas Data Review View Help Share Times New R 12 2 Wrap Text Percentage Currency (0) Autosum. 47 X Cut 3 Copy Format Painter Clipboard AA A. Paste BIU. $ . % ) Merge & Center - . 1 Currency Conditional Format as Percent Formatting Table Styles Insert Delete Form Clear- Sort & Find & Filter - Select Editing Font Alignment Number Cells F7 =(C7-EVEZ G H J K L M N 0 A B D E 1 Appendix D-11 2 3 Water Play, Inc. 4 Revised Income Statement 5 For Year Ended December 31, 20XX 6 7 Sales revente $ 1.890,000,000 $ 2.160.000.000 -12.5% 8 Less Cost of goods sold 1.192.138.125 1.314.408.000 -9.3% 9 Gross margin 697,861.875 845,392.000 - 17,5% 10 Operating expenses: 11 Selling and administrative expenses $ 521,968,875 $ 536,550,000 12 Bad debts expense 9,450,000 10.800,000 13 Total operating expenses 531.418.875 547,350,000 -2.9% 14 Net operating income 166.443.000 298.242.000 -44.2% 15 Interest expense 23.588.202 19.835.200 18.99 16 Net income $ 142,854,797 $ 278,406,800 -48.7% 17 18 19 20 21 22 23 24 25 26 27 28 29 ... Finished GoodsinventoryPart3 D-9 Cash Budget Part 3 D-10 Income Statement Part 3 D-11 Balance SheetPart 3 D- Ready IR Type here to search Oi e W x Average: -16.6 Count: 7 Surt 116.1% 100% II 10 1:12 PM 5/6/2020 December 31, 20XX $ 66,618.588 175.500.000 13.500.000 34.096.410 $ 203.406.800 175.500.000 13,500.000 32.860.200 67 2% 00% 0.0% 3.8% $ 289.714.997 $425.267.000 31 9% Assets Currrent assets: Cash Accounts receivable Raw material inventory Finished goods inventory Total current assets Noncurrent assets: Land Buildings Equipment Less: Accumulated depreciation Total Noncurrent Assets Total Assets 12.000.000 72.000.000 140.000.000 (25.550.000) 12.000.000 72.000.000 140.000.000 (25.550.000) 0.0% 0 0% 0.0% 0.0% 198.450.000 $ 488,164.997 198.450.000 $ 623.717.000 009 21. 7% Liabilities Current liabilities: Accounts payable Noncurrent liabilities: Note payable Total liabilities 49.950.000 49.950.000 00% 0096 150.000.000 199.950,000 150.000.000 199.950,000 00% Stockholders' Equity Common stock (S1 par value, 25 million shares authorized, 3 million shares issued and outstanding Paid in capital Total contributed capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 3,000,000 142.360,200 145,360,200 142.854,797 3,000,000 142,360,200 145,360,200 278,406,800 0.0% 0.0% 0.0% -48.7% 288.214,997 $ 488,164,997 423,767,000 $ 623,717,000 -32.0% -21.7% Water Play, Inc. Revised Cash Budget December 31, 20XX S Q1 Q2 25,000,000 $ 25,000,000 $ 221,100,000 428,850,000 246.100.000 453.850.000 Q3 25,000,000 $ 517,800,000 542.800.000 Q4 Year 86,384,310 S 25,000,000 537,300,000 1,705.050,000 623.684,310 1.730.050,000 25,000,000 1,973,700,000 1,998.700.000 0.0% -13.6% -13.4% Beginning cash balance Cash collections Cash available Disbursements: Material purchases Direct labor Manufacturing overhead Selling and administrative Total disbursements Excess or (Deficiency) Financing section: Borrowings Repayments Interest on long-term note Interest on short-term borrowing Financing total Ending cash balance 51,353,190 30,327,566 102.271,784 120,348,125 304,300,665 (58,200,665) 108,933,120 46.462.487 139.858,498 131,270,750 426,524.854 27,325,146 131,313,690 52.002,000 136,250,000 133,100,000 452,665,690 90,134,310 135,000,000 52.002,000 136,250,000 133,100,000 456,352.000 167,332,310 426,600,000 180,794.053 514,630,282 517,818,875 1,639,843.210 90,206,790 490,050,000 208,008,000 545,000,000 532,400,000 1,775,458.000 223.242.000 -12.9% -13.1% -5.6% -2.7% -7.6% -59.6% 86.950,665 1.424.854 (3,750,000) (3,750,000) (88,375,520) (3,750,000) (3,750,000) (8,588.202) (3,750,000) (100.713,722) 86,384,310 S 66,618,588 S 88,375,520 (88,375,520) (15,000,000) (8,588.202) (23,588,202) 66,618,588 48.352.000 82.8% (48,352,000) 82.8% (15,000,000) 0.0% (4.835.200) 77.6% (19,835,200) 18.9% 203,406,800 -67.2% 83,200,665 (2.325.146) 25,000,000 $25,000,000 $ S Sign in Press esc to exit full screen File Home Insert Draw Page Layout Formulas Data Review View Help Share Times New R 12 2 Wrap Text Percentage Currency (0) Autosum. 47 X Cut 3 Copy Format Painter Clipboard AA A. Paste BIU. $ . % ) Merge & Center - . 1 Currency Conditional Format as Percent Formatting Table Styles Insert Delete Form Clear- Sort & Find & Filter - Select Editing Font Alignment Number Cells F7 =(C7-EVEZ G H J K L M N 0 A B D E 1 Appendix D-11 2 3 Water Play, Inc. 4 Revised Income Statement 5 For Year Ended December 31, 20XX 6 7 Sales revente $ 1.890,000,000 $ 2.160.000.000 -12.5% 8 Less Cost of goods sold 1.192.138.125 1.314.408.000 -9.3% 9 Gross margin 697,861.875 845,392.000 - 17,5% 10 Operating expenses: 11 Selling and administrative expenses $ 521,968,875 $ 536,550,000 12 Bad debts expense 9,450,000 10.800,000 13 Total operating expenses 531.418.875 547,350,000 -2.9% 14 Net operating income 166.443.000 298.242.000 -44.2% 15 Interest expense 23.588.202 19.835.200 18.99 16 Net income $ 142,854,797 $ 278,406,800 -48.7% 17 18 19 20 21 22 23 24 25 26 27 28 29 ... Finished GoodsinventoryPart3 D-9 Cash Budget Part 3 D-10 Income Statement Part 3 D-11 Balance SheetPart 3 D- Ready IR Type here to search Oi e W x Average: -16.6 Count: 7 Surt 116.1% 100% II 10 1:12 PM 5/6/2020 December 31, 20XX $ 66,618.588 175.500.000 13.500.000 34.096.410 $ 203.406.800 175.500.000 13,500.000 32.860.200 67 2% 00% 0.0% 3.8% $ 289.714.997 $425.267.000 31 9% Assets Currrent assets: Cash Accounts receivable Raw material inventory Finished goods inventory Total current assets Noncurrent assets: Land Buildings Equipment Less: Accumulated depreciation Total Noncurrent Assets Total Assets 12.000.000 72.000.000 140.000.000 (25.550.000) 12.000.000 72.000.000 140.000.000 (25.550.000) 0.0% 0 0% 0.0% 0.0% 198.450.000 $ 488,164.997 198.450.000 $ 623.717.000 009 21. 7% Liabilities Current liabilities: Accounts payable Noncurrent liabilities: Note payable Total liabilities 49.950.000 49.950.000 00% 0096 150.000.000 199.950,000 150.000.000 199.950,000 00% Stockholders' Equity Common stock (S1 par value, 25 million shares authorized, 3 million shares issued and outstanding Paid in capital Total contributed capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 3,000,000 142.360,200 145,360,200 142.854,797 3,000,000 142,360,200 145,360,200 278,406,800 0.0% 0.0% 0.0% -48.7% 288.214,997 $ 488,164,997 423,767,000 $ 623,717,000 -32.0% -21.7%
