J&R Outdoor Furniture Manufacturers is owned and operated by twin siblings Joyce Yancy-Tate and Royce Yancey....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
J&R Outdoor Furniture Manufacturers is owned and operated by twin siblings Joyce Yancy-Tate and Royce Yancey. The company has been in operation for several years and manufactures 3-piece sets of outdoor furniture in a variety of colors and patterns. The company has been quite successful over the past years but has experienced a slow decline in profits for the past couple of quarters, according to reports generated by the administrative staff. A month ago, Joyce, took a leave of absence from the business to take care of her newborn twin Sons. Joyce is the Chief Financial Officer for the Company. An assistant business manager/accountant was hired temporarily to assist the staff in carrying out the accounting and financial duties. The company had been consistently reporting net profits over the years but a decline in profits over the past couple of quarters is quite noticeable. The Yancey twins are troubled by this performance and believe they need an expert to review the company's records and operations. Consequently, they have retained your consulting firm to perform research and evaluation and provide recommendations for improvement and recovery of profitable operations. There is also a need for an improved cash flow management strategy. Two distinct areas that you are investigating are manufacturing operations and cash flow management. Details are provided below for both areas. Cash flow and Financing Before leaving, Joyce advised Royce that there is a need for better forecasting regarding the company's cash inflows and outflows. After a series of questions, you determined that (1) the company had not prepared a cash budget for several quarters and (2) is not up to date on its payables and receivables. You are going to prepare a forecasted income statement and a forecasted cash budget for the fourth quarter. Pertinent information needed has been collected and is outlined below. Pertinent Information: The business manager/accountant and Royce provided projections pertaining to the 2d quarter (April through June 2020) and other information outlined below: 1. Total sales 2nd quarter: 2,500 3-piece set; Sales price is $900/3-piece set 2. Total Sales for the 3rd quarter are projected to increase 8.5% above the 2nd quarter total sales due to an aggressive marketing program that began June 1, 2020. per month are expected to be realized as follows: 40% in July, 35% in August, and 25% in September. The sales budgets expressed in sales dollars arid in the number of furniture Total quarter sales sets sold are as follows: PROJECTED July August September TOTAL QTR SALES REVENUE SALES 8.5% increase) $610,313 $854,438 $976,500 $2,441,250 SALES: PRICE X QUANTITY $610,313 $854,438 $976,500 $2,441,250 Number of Furmiture Sets Sold July August September TOTAL QTR Number of Furniture Sets Sold 678 949 1,085 2,713 3. Monthly Sales are classified as follows and realized in corresponding percentage: a. Cash sales.. b. Credit sales. 35% of total sales 65% of total sales 4. Monthly credit sales are collected as follows and in the corresponding proportion: a. Collected in the month of the sale, 60% b. Collected one month after the sale month, 25% c. Collected the second month after the sale month, 15% Royce is greatly disturbed by these reported results. The company had been reporting profit in prior quarters. Consequently, he and Joyce agreed to retain you as a consultant and have asked you to review the income statement and recommend any needed corrections and adjustments. You talked with the administrative staff and obtained the following additional data: A. Inventory Data April 1 June 30 Raw Material Work-in-Progress Finished Goods $153,000 $48,000 72,000 84,000 90,000 144,000 B. Fifty percent (50%) of the utility expense and sixty-six and two-thirds percent (66 2/3%) of the insurance expense are to be applied to the factory. The remaining amounts are to be considered selling and administrative expenses. REQUIRED: Based on your assessment, the following schedule and financial statement are to be prepared and revised, respectively, in the proper format. 1. A detailed schedule of cost of good sold for the quarter ended June 30, 2020. 2. A corrected multi-step income statement for the quarter ended June 30, 2020. (See format in Exhibit #1) PART ONE Manufacturing and Budgeting The newly hired business manager/accountant prepared the following income statement for the quart ended June 30, 2020: & R's Outuoor Furniture Manufacturers Income Statement For the Second Quarter Ended June 30, 2020 Sales Revenue (2,500 sets @ $900) $2,250,000 Operating Expenses Raw Material Purchases $792,000 Advertising 270,000 Indirect labor 84,000 Direct Labor 570,000 Selling and Adm. Salaries Utilities expense 225,000 58,000 Rent-Factory Building 250,000 Insurance expense 45,000 Depreciation-Factory equipment Depreciation-Sales equipment 91,000 135,000 Total Sell/Admin Expenses 2,540,000 Net Income (Loss) (5270,000) J&R Outdoor Furniture Manufacturers is owned and operated by twin siblings Joyce Yancy-Tate and Royce Yancey. The company has been in operation for several years and manufactures 3-piece sets of outdoor furniture in a variety of colors and patterns. The company has been quite successful over the past years but has experienced a slow decline in profits for the past couple of quarters, according to reports generated by the administrative staff. A month ago, Joyce, took a leave of absence from the business to take care of her newborn twin Sons. Joyce is the Chief Financial Officer for the Company. An assistant business manager/accountant was hired temporarily to assist the staff in carrying out the accounting and financial duties. The company had been consistently reporting net profits over the years but a decline in profits over the past couple of quarters is quite noticeable. The Yancey twins are troubled by this performance and believe they need an expert to review the company's records and operations. Consequently, they have retained your consulting firm to perform research and evaluation and provide recommendations for improvement and recovery of profitable operations. There is also a need for an improved cash flow management strategy. Two distinct areas that you are investigating are manufacturing operations and cash flow management. Details are provided below for both areas. Cash flow and Financing Before leaving, Joyce advised Royce that there is a need for better forecasting regarding the company's cash inflows and outflows. After a series of questions, you determined that (1) the company had not prepared a cash budget for several quarters and (2) is not up to date on its payables and receivables. You are going to prepare a forecasted income statement and a forecasted cash budget for the fourth quarter. Pertinent information needed has been collected and is outlined below. Pertinent Information: The business manager/accountant and Royce provided projections pertaining to the 2d quarter (April through June 2020) and other information outlined below: 1. Total sales 2nd quarter: 2,500 3-piece set; Sales price is $900/3-piece set 2. Total Sales for the 3rd quarter are projected to increase 8.5% above the 2nd quarter total sales due to an aggressive marketing program that began June 1, 2020. per month are expected to be realized as follows: 40% in July, 35% in August, and 25% in September. The sales budgets expressed in sales dollars arid in the number of furniture Total quarter sales sets sold are as follows: PROJECTED July August September TOTAL QTR SALES REVENUE SALES 8.5% increase) $610,313 $854,438 $976,500 $2,441,250 SALES: PRICE X QUANTITY $610,313 $854,438 $976,500 $2,441,250 Number of Furmiture Sets Sold July August September TOTAL QTR Number of Furniture Sets Sold 678 949 1,085 2,713 3. Monthly Sales are classified as follows and realized in corresponding percentage: a. Cash sales.. b. Credit sales. 35% of total sales 65% of total sales 4. Monthly credit sales are collected as follows and in the corresponding proportion: a. Collected in the month of the sale, 60% b. Collected one month after the sale month, 25% c. Collected the second month after the sale month, 15% Royce is greatly disturbed by these reported results. The company had been reporting profit in prior quarters. Consequently, he and Joyce agreed to retain you as a consultant and have asked you to review the income statement and recommend any needed corrections and adjustments. You talked with the administrative staff and obtained the following additional data: A. Inventory Data April 1 June 30 Raw Material Work-in-Progress Finished Goods $153,000 $48,000 72,000 84,000 90,000 144,000 B. Fifty percent (50%) of the utility expense and sixty-six and two-thirds percent (66 2/3%) of the insurance expense are to be applied to the factory. The remaining amounts are to be considered selling and administrative expenses. REQUIRED: Based on your assessment, the following schedule and financial statement are to be prepared and revised, respectively, in the proper format. 1. A detailed schedule of cost of good sold for the quarter ended June 30, 2020. 2. A corrected multi-step income statement for the quarter ended June 30, 2020. (See format in Exhibit #1) PART ONE Manufacturing and Budgeting The newly hired business manager/accountant prepared the following income statement for the quart ended June 30, 2020: & R's Outuoor Furniture Manufacturers Income Statement For the Second Quarter Ended June 30, 2020 Sales Revenue (2,500 sets @ $900) $2,250,000 Operating Expenses Raw Material Purchases $792,000 Advertising 270,000 Indirect labor 84,000 Direct Labor 570,000 Selling and Adm. Salaries Utilities expense 225,000 58,000 Rent-Factory Building 250,000 Insurance expense 45,000 Depreciation-Factory equipment Depreciation-Sales equipment 91,000 135,000 Total Sell/Admin Expenses 2,540,000 Net Income (Loss) (5270,000)
Expert Answer:
Answer rating: 100% (QA)
1computation of cost of Goods sold Direct Material Beginning of material inventory 4800000 Add Purch... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
The Springfield Clinic is owned and operated by ten local doctors as a partnership. Recently, a paralyzed patient sued the clinic for malpractice, for a total of $20 million. The clinic carries...
-
The Springfield Clinic is owned and operated by ten local doctors as a partnership. Recently, a paralyzed patient sued the clinic for malpractice, for a total of $20 million. The clinic carries...
-
The C'mon Back Restaurant in Puerto Rico is owned and operated by Theotis Jones. The restaurant just completed its third year of operation. During that time, Theotis sought to establish a reputation...
-
The flexural rigidity of a rod-like structure like a microtubule is a measure of its bending stiffness. Flexural rigidity is given by EL, where E is the Young?s modulus and L is the geometrical...
-
What could group members have done differently to increase group effectiveness?
-
Let a. Is w in {V 1 , V 2 , V 3 }? How many vectors are in {V 1 , V 2 , V 3 }? b. How many vectors are in Span {V 1 , V 2 , V 3 }? c. Is w in the subspace spanned by {V 1 , V 2 , V 3 }? Why? --00-0...
-
Search the Internet and determine what hap- pened to these individuals. a. Robert Pfaff (KPMG). b. Adrian Dicker (BDO Seidman).
-
On January 1, 2015, Vacation Destinations issues $40 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Required: 1....
-
The following list includes temporary accounts from the December 31 adjusted trial balance of Emiko Company. Use these normal account balances to journalize closing entries. K. Emiko, Withdrawals...
-
The accompanying data file shows the net profit (Net_Profit) counter sales (Counter_Sales), and drive-through sales (Drive_Sales) for a chain of 100 fast-food restaurants. All variables are measured...
-
An airline employee throws two suitcases, one 15 kg and one 20 kg in mass, onto a 25 kg luggage trolley. If you know that the trolley is initially at rest and the employee imparts a horizontal speed...
-
A bond pays a coupon of $21 two times each year and matures in 19 years. The yield is 3.93%. How much is it worth today? Answer:
-
HONDA Inc. is using Just-in-Time Production System and Backflush Cost Accounting System for the year ended December 31, 2016. The following information was provided for the year 2016: A. Raw...
-
A $ 120,000 promissory note signed on April 1 maturing in 8 months and with 5% simple interest is sold to Ariel on July 14 on the basis of a return on investment of 6% ordinary compound. How much...
-
You have invested $12,000 in AAA stock, $8,000 in BBB stock, and $6,000 in CCC stock. If you expect the return on AAA to be 5% in the next year, the return on BBB to be 3%, and the return on CCC to...
-
Assume that a firm trades on both the Frankfurt Stock Exchange in Germany and on the New York Stock Exchange in the US. On the Frankfurt bourse, it closed at a price of 51.05. On the same day, the...
-
Use the axioms for the ADT list, as given in this chapter in the section "Axioms," to prove that the sequence of operations
-
A test car is driven a fixed distance of n miles along a straight highway. (Here n Z+.) The car travels at one mile per hour for the first mile, two miles per hour for the second mile, four miles...
-
Eurotronics is a European manufacturer of electronic components. During the course of a year, it requires container cargo space on ships leaving Hamburg bound for the United States, Mexico, South...
-
The 23,000-seat City Coliseum houses the local professional ice hockey, basketball, indoor soccer, and arena football teams, as well as various trade shows, wrestling and boxing matches, tractor...
-
The U.S. Army Corps of Engineers has historically constructed dams on various rivers in the southeastern United States. Its primary instrument for evaluating and selecting among many projects under...
-
Which of the following is accurate concerning the IAASB due process? (a) The IAASB follows a rigorous due process in developing its pronouncement (b) Input is obtained from a wide range of...
-
What methods can be used for selecting and evaluating information systems projects and aligning them with the firms business goals? Name and describe the groups responsible for the management of...
-
How can firms assess the business value of information systems projects? List and describe the major costs and benefits of information systems. Distinguish between tangible and intangible benefits
Study smarter with the SolutionInn App