Part II: Open Ended Aecounting Problems favtrictions: Determine a final mamerical answer for euch fresfion. Yow will record yrat ANSWERS ONLY on THPS-I Answer Submission Form an iCollege. For all questions (unless orherwise specifically intracted) round af necessary) all answers to whole dollar amounts (i.e., sero decimal places). but you will NOT recorc the dollar sign or any commas on iCollege. For example, rownd $24,302.84 to $24,303 and recand this value or iCollege at 24303 . USE THE FOLLOWING INFORMATION TO ANSWER QUESTIONS 10 - 21 Using the assumptions below concerning the Fast Growth Company, construct income statements, balance sheets and cash inflow-outflow statements for the company for the months of January, February, and March: ASSIMPTIONS: - Initial investment (made on January I when company begins operations) =$700,000 - Selling price =$60 per unit - COGS= variable cost =$40 per unit - Fixed costs =$15,000 per month - Credit policy = net 45 days (assume all sales are on credit) - Inventory policy = 21 -day supply (Note that this means inventory at the end of the month will be 21/30 of sales for that month. Thus, given that January sales =4,000 units (sce below), January ending inventory will be 2.800 units). - Iaventory carried at cost (i.e, at $40 per unit) - All bills are paid immediately (this implies that accounts payable and aceruals - S0) - Dividends =20 :e of monthly net income - There are 30 days in every month. - All revenues, costs, cash inflows and cash outflows are evenly distributed through the month. - If additional funds are needed, these will be in the form of debe (i.e., bank loans). The company will borrow moncy if cash =$0 on the balance sheet. The amount borrowed will be what is necessary to balance the balance sheet with cash =$0. - Monthly Sales: lanuary =4,000 units, February =8,000 units, March =14,000 units For each month, your statements should inelude the accounts shown below: 18. March addition to retained earnings = 19. March ending cash balance (i.e., Cash from the balance 20. March payment for purchases = 21. March net cash flow =
