JUST NEED D & E!!

Cash flow and Financing Before leaving, Steevan Harrland, Jr., advised his dad that there also is a need for better forecasting regarding the company's cash inflows and outflows. After a series of questions, you determined that (1) the staff had not prepared a cash budget for several quarters and (2) is not up to date on the company's 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 Mr. Harrland, Sr, provided projections pertaining to the 40 quarter (October through December 2020) and other pertinent information outlined below: 1. Total sales 34 quarter: 5,200 GPS devices: Sales price is $450/GPS device 2. Total Sales for the 4* quarter are projected to increase 5% above the 3 quarter total sales due to an aggressive marketing program that began September 1, 2020 Total quarter sales per month are expected to be realized as follows: 25% in October, 35% in November, and 40% in December. The sales budgets expressed in sales dollars and in the e number of GPS devices sold are as follows: PROJECTED Oct Nov Dec TOTAL QTR SALES REVENUE SALES S614.250 $859.950 S982,800 $2.457.000 SALES: PRICE X QUANTITY 5614,250 S859,950 5982,800 $2,457,000 SALES: PRICE X QUANTITY S614.250 $859,950 S982.800 $2,457,000 Quantity of GPS Devices Sold Oct Nov Dec TOTAL QTR Quantity of GPS Devices Sold 1,365 1.911 2,184 5,460 3. Monthly Sales are classified as follows and realized in corresponding percentage: a. Cash sales......... ..28% of tqtal sales b. Credit sales...... 72% of total sales 4. Monthly credit sales are collected as follows and in the corresponding proportion: a Collected in the month of the sale, 40% b. Collected one month after the sale month, 35% 4. Monthly credit sales are collected as follows and in the corresponding proportion: a. Collected in the month of the sale, 40% b. Collected one month after the sale month, 35% c Collected the second month after the sale mouth, 25% 5. Cost Classifications based on 3 quarter information: Costs Fixed Costs Variable Costs Raw Materials used in Manufacturing (See corrected COGS Schedule in Part 1. Required 1) Actual Costs on 3 Quarter Income Statement Direct Labor 570,000 Factory Overhead: Rent Factory $ 180,000 Tudirect Labor 84.000 $4,000 Indirect Labor 22,000 Insurance - Factory (66 2/39) 9,000 27,000 Utility Factory (75%) 91,000 Depreciation factory building 1 General Administrative 270,000 Advertising expense 135,000 Selling Administrative Wages and Salaries 90,000 Selling & Administrative Wages and Salaries 90.000 135,000 Utility Selling & Administrative (25%) 8,400 3,600 Insurance-Administrative (331/3%) 11,000 Depreciation-Administrative 135,000 6. All factory overhead and administrative expenses (except depreciation) are paid in cash in the month the cost is incurred. 7. Direct labor is paid at the end of the month 8. Raw material credit purchases (he, on account) are paid as follows: 50% in the month of the purchase, 30% the month after the purchase, and 20% in the second month following the purchase The raw materiale purchases budget is as follows: PROJECTED Oct Nov Dec TOTAL QIR RAW MATERIAL PURCHASES The purchase, 30% the month after the purchase, and 20% in the second month following the purchase. raw materials' purchases budget is as follows: Oct PROJECTED Nov Dec TOTAL QTR RAW MATERIAL PURCHASES S166,950 $233,730 S267,120 NEEDED FOR SALES $667.800 DESIRED ENDING 41,738 58,433 66,780 LESS: BEGINNING (204,000) (41.735) (58,433) PURCHASES S4,685 $250,425 $275,468 $530,580 a. Property taxes, due November 274, S2,790 b. Employee payroll taxes due December 15, $4,500, REQUIRED: You are to perform the following tasks for the Harrlands: a. Compute the unit cost of goods sold using 3's quarter information and the corrected cost of goods sold statement you prepared in Part One. b. Prepare a projected traditional multi-step income statement for the 4 quarter using information in "a." above and the 3 quarter information on the table in "5" above (see the previous page). For proper formatting, see Exhibit 1 at the end of this document. c. Prepare a schedule of collections from credit sales for each month of the 4" quarter. Relevant prior months' credit sales: August credit sales. $693,300 September credit sales, $624,000 d. Prepare a schedule of payments for raw materials purchased on credit (on account) for each month of the 4" quarter. Relevant prior months' purchases on credit (on account): August purchases on credit (on account) 5291,400 September purchases on credit (on account), S265,540 e. Prepare a projected Cash Flow Budget for the 4" quarter. Your budget should include a monthly budget for each of the three months in the quarter. The beginning cash balance on October 1.2020 is $1.214,000