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Crane Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Robert Williams, the firm's marketing director, has

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Crane Products, a rapidly growing distributor of home gardening equipment, is formulating its plans for the coming year. Robert Williams, the firm's marketing director, has completed the following sales forecast. Month Sales January February March April May June $900,000 $1,160,000 $900,000 $1,260,000 $850,000 $950,000 Month July August September October November December Sales $1,310,000 $1,500,000 $1,600,000 $1,600,000 $1,500,000 $1,700,000 John Johnson, an accountant in the Planning and Budgeting Department, is responsible for preparing the cash flow projection. He has gathered the following information. . All sales are made on credit. Crane's excellent record in accounts receivable collection is expected to continue, with 30% of billings collected in the month of sale, 60% of billings collected in the month after sale and the remaining 10% collected two months after the sale. Cost of goods sold, Crane's largest expense, is estimated to equal 45% of sales dollars. Forty percent of inventory is purchased one month prior to sale and 60% during the month of sale. For example, in April, 60% of April cost of goods sold is purchased and 40% of May cost of goods sold is purchased. All purchases are made on account. Historically, 75% of accounts payable have been paid during the month of purchase, and the remaining 25% in the month following purchase. Hourly wages and fringe benefits, estimated at 30% of the current month's sales, are paid in the month incurred. O General and administrative evnences are proiected to be $1461000 for the year A breakdown of the evnenses follow AIL . Hourly wages and fringe benefits, estimated at 30% of the current month's sales, are paid in the month incurred. General and administrative expenses are projected to be $1,461,000 for the year. A breakdown of the expenses follows. All expenditures are paid monthly throughout the year, with the exception of property taxes, which are paid in four equal installments at the end of each quarter. $ 291,000 Salaries and fringe benefits Advertising Property taxes Insurance Utilities Depreciation Total 408,000 80,000 192,000 144,000 346,000 $ 1,461,000 . Operating income for the first quarter of the coming year is projected to be $320,000. Crane is subject to a 40% tax rate. The company pays 100% of its estimated taxes in the month following the end of each quarter. Crane maintains a minimum cash balance of $50,000. If the cash balance is less than $50,000 at the end of the month, the company borrows against its 12% line of credit in order to maintain the balance. All borrowings are made at the beginning of the month, and all repayments are made at the end of the month (in increments of $1,000). Accrued interest is paid in full with each principal repayment. The projected cash balance on April 1 is $50,000. Prepare the cash receipts budget for the second quarter. (Enter answers in necessary fields only. Leave other fields blank. Do not enter O.) Cash Receipts Budget May April June Total Cash Reci $ 116000 $ February sales March sales April sales 540000 92000 378000 720000 120000 May sales 261000 522000 June sales 291000 Totals $ 1034000 $ 107300 $ 933000 $ Accounts Receivable balance at the end of second quarter $ 766000

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