please use excel with tje formulas to how to do it on excel

Screens Tops Screenshot Tops, Inc. The Business Situation After graduating with a degree in business from Rural College in Campus Town, USA, Michael Woods realized that he wanted to remain in Campus Town and start building a life for himself. After a few unsuccessful attempts at getting a job in his chosen discipline, Michael decided to start his own business Thinking about his business venture, Michael determined that he had four criteria that were most important to him 1. He wanted to do something that he would enjoy. 2. He wanted a business that would give back to the community 3. He wanted a business that could grow and be more successful every year. 4. Realizing that he was going to have to work very hard, Michael wanted a business that would generate a minimum net income of at least $25,000 annually. A bit more about Michael: he was president of his fraternity and served as an officer in several other student organizations and clubs. During these experiences, he realized that there was no place in Campus Town to have custom shirts made using a silk-screen process. When student organizations wanted shirts for their members to wear or to sell for fundraising on campus, the officers had to make a trip to Big City, over 100 miles away, and visit "Shirts and More." Michael grew up in Big City and worked as a part-time employee at Shirts and More while he was in high school. Back then, he envisioned owning such a shop someday. Michael realized that a shop in Campus Town had the potential to meet all four of his criteria. He set up an appointment with Jayne Stoll the owner of Shirts and More, to obtain information useful in getting his shop started. Because Jayne liked Michael and was intrigued by his enterprising spirit, she was happy to answer Michael's questions and help him. Jayne provided information concerning the equipment Michael would need for his business and its average useful life. Fortunately for Michael, Jayne knows of a competitor who is retiring at the end of the year and would like to sell his equipment. Michael can purchase the equipment at the beginning of 2022, and the retiring owner is willing to give him terms of 50% due upon purchase and 50% due at the end of the quarter following the purchase. Michael decided to purchase the following equipment as of January 1, Cost Useful Life $7,500 5 yrs. 1.350 10 yrs 2,500 10 yrs Hand operated press that applies ink to the shirt Light-exposure table Dryer conveyor belt that makes ink dry on the shirts Computer with graphics software and color printer Display furniture Used cash register 3,500 4 yrs 2,000 10 yrs 500 5 yrs Michael has decided to use a shirt supplier recommended by Jayne. He learned that a gross of good quality shirts to be silk screened would cost $1.440. Jayne has encouraged Michael to ask the shirt supplier for terms of 40% of a quarter's purchases to be paid in the quarter of purchase, with the remaining 60% of the quarter's purchases to be paid in the quarter following the purchase as this was routine in the industry Michael also learned from talking with Jayne that the ink used in the silk-screen process costs approximately $0.75 per shirt on average. Knowing that the silk-screen process is somewhat labor-intensive, Michael plans to hire six college students to help with the process. Each one will work an average of 20 hours per week for 50 weeks during the year. Michael estimates total annual wages for the workers at the state's current minimum wage to be $72.000 in total In addition, Michael will need one person to take orders, bill customers, and operate the cash register:Cary Smith, who currently works in the Student Development department at Rural College, has approached Michael about a job in sales. Cary knows the officers of all the student organizations on campus. In addition, she is very active in the community and may be able to expand the business' reach. Michael thinks Cary can bring in a lot of business. In addition, she also has the administrative skills needed for the position. Because of her contacts, Michael is willing to pay Cary S1,200 per month plus a commission of 10% of sales. Michael estimates Cary will spend 50% of the workday focusing on marketing and sales and the remaining 50% will be spent on administrative duties. Michael realizes that may have difficulty finding a person skilled in computer graphics to generate the designs to be printed on the shirts, Jayne recently hired a graphics designer in that position for Shirts and More at a rate of $500 per month plus $0.10 for each shirt printed. Michael believes he can find a top Rural College graphics design student to work for the same rate layne is paying her designer. Michael was fortunate to find a commercial building for rent near the college in the downtown area. The landlord requires a one-year lease. Although the monthly rent of $1,000 is more than Michael had anticipated paying the building is nice, has adequate parking, and there is room for expansion. Michael anticipates that 75% of the building will be used in the silk screen process and 25% will be used for sales and administration 1A gross is a dozen dozen or 144 units sometimes called a square dozen a Michael's friends have encouraged him to advertise weekly in the Rural College student newspaper, Upon inquiring. Michael found that a 3" x 3" ad would cost $25 per week. Michael also plans to run a weekly ad in the local newspaper that will cost him $75 per week. Michael's goal is to sell a large number of quality shirts at a reasonable price. He estimates the selling price of each customized shirt to be $16. Jayne has suggested that he should ask bulk order customers to pay for 70% of their purchases in the quarter purchased and pay the additional 30% in the following quarter. After talking with the insurance agent and the property valuation administrator in his municipality, Michael estimates that the property taxes and insurance on the machinery will cost $2,240 annually. property tax and insurance on display furniture and cash register will total $380 annually. Jayne reminded Michael that maintenance of the machines is required for the silk-screen process. In addition, Michael realizes that he must consider the cost of utilities to run the shop The building Michael wants to rent is roughly the same size as the building occupied by Shirts and More. In addition, Shirts and More sells approximately the same number of shirts Michael plans to sell in his store, Therefore, Michael is confident that the maintenance and utility costs for his shop will be comparable to the maintenance and utility costs for Shirts and More, which are as follows within the relevant range of zero to 8,000 shirts per month Shirts Maintenance Utility January 2,000 $1,716 51.100 February 2,110 1,720 1.158 March 2,630 1.740 1.171 April 3,150 1,740 1.198 5,000 1,758 1,268 June 5,300 1,818 July 3,920 1,825 1.205 August 2,080 1.780 1.117 September 8,000 1,914 1.400 October 6,810 1,860 1,362 November 6,000 1,855 1,347 December 3,000 1,749 1,193 Sold Costs Costs May 1.274 Michael estimates the number of shirts to be sold in the first five quarters, beginning at the start of the new year, to be: First quarter, year 1 8.000 Second quarter, year 1 10,000 Third quarter, year 1 20,000 Fourth quarter, year 1 12.000 First quarter, year 2 18,000 Michael decides to establish his company as a regular or C-corporation. He will invest $10,000 of his personal savings in the company. Seeing how determined his son was to become an entrepreneur, Michael's father offered to co-sign a note for an amount up to $20,000 to help Michael open his shirt shop. Screenshot Tops, Inc. However, when Michael and his father approached the loan officer at First Guarantee Bank the loan officer asked Michael to produce the following budgets for 2022 Sales budget Schedule of expected collections from customers for shirt purchases budget Schedule of expected payments for purchases Silk-screen labor budget Selling and administrative expenses budget Sill-screen overhead expenses budget Budgeted income statement Cash budget Budgeted balance sheet The loan officer advised Michael that the interest rate on a 12-month loan would be 8% Michael expects the loan to be taken out as of January 1 when he purchases the equipment. Michael has estimated that his income tax rate will be 20%. He expects to pay the total tax due when the returns are filed in 2023 Instructions 3 4 Answer the following questions. 1. Do you think it was important for Michael to stipulate his four criteria for the business, including the goal of generating a net income of at least $25,000 annually? Why or why not? - Answer in MS Word document 2. If the company has sales of $12,000 during January of the first year of business, determine the amount of variable and fixed costs associated with a) utilities and b) maintenance using the high-low method for each (Round unit variable costs to three decimal places where necessary:)) Compute the expected total maintenance and utility cost at $12,000 Sales volume. 3. Using the format below, prepare a sales budget for the year ending 20xx. Screenshot Tops, Inc Sales Budget For the Year Ended December 31, 20xx Quarter Year Expected unit sales Unit selling price Budgeted sales revenue 4. Prepare a schedule of expected collections from customers Screenshot Tops, Inc. Schedule of Collections from Customers For the Year Ended December 31, 20xx Quarter 1 Year Accounts receivable 1/1/XX First quarter Second quarter Third quarter Fourth quarter Total collections S. Michael learned from talking with Jayne that the supplier is so focused on making quality shirts that many times the shirts are not available for several days She encouraged Michael to maintain an ending inventory of shirts equal to 25% of the next quarter's sales. Prepare a shirt purchases budget for shirts using the format provided. Screenshot Tops, Inc. Shirt Purchases Budget For the Year Ended December 31, 20xx Quarter Year 1 Shirts to be silk screened Plus: Desired ending inventory Total shirts required Less: Beginning inventory Totalshirts to purchase Cost per shirt Total cost of shirt purchases 6. Prepare a schedule of expected payments for purchases. Screenshot Tops, Inc Schedule of Expected Payments for Purchases For the Year Ended December 31, 20xx Quarter 1 2 3 4 Accounts payable 1/1/xx First quarter Second quarter Third quarter Fourth quarter Total payments Year -0- 7. Prepare a silk-screen labor budget. Screenshot Tops, Inc Silk-screen Labor Budget For the Year Ended December 31, 20xx Quarter 1 2 3 4 Year Units to be produced Silk-screen labor hours per unit Total required silk screen labor hours Silk-screen labor cost per hour Total silk-screen labor cost 8. Prepare a selling and administrative expenses budget for Screenshot Tops, Inc. for the year ending December 31, 20xx Screenshot Tops, Inc. Selling and Administrative Expenses Budget For the Year Ended December 31, 20xx Quarter 1 3 4 Year Variable expenses Sales commissions Total variable expenses Fixed expenses: Advertising Rent Sales salaries Office salaries Depreciation Property taxes and insurance Total fixed expenses Total selling and administrative expenses 9. Prepare a silk screen overhead expenses budget for Screenshot Tops, Inc for the year ending December 31, 20xx Screenshot Tops, Inc Silk-screen Overhead Expenses Budget For the Year Ended December 31, 20xx Quarter Year Variable expenses Ink Maintenance Utilities Graphics design Total variable expenses Fixed expenses Rent Maintenance Utilities Graphics design Property taxes and insurance Depreciation Totalfixed expenses Total silk-screen overhead Direct silk-screen hours Overhead rate per silk-screen hour 10. Using the information found in the case and the previous budgets, prepare a budgeted income statement for Screenshot Tops. Inc. for the year ended December 31, 2016 Screenshot Tops, Inc. Budgeted Income Statement For the Year Ended December 31, 20xx Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations Interest expense Income before income taxes Income tax expense Net income 11. Using the nformation found in the case and the previous budgets, prepare a cash budget for Screenshot Tops, Inc. for the year ended December 31, 20xx Screenshot Tops, Inc. Cash Budget For the Four Quarters Ended December 31, 20xx Quarter 1 2 3 4 Beginning cash balance Add: Receipts Collections from customers Total available cash Less: Disbursements Payments for shirt purchases Silk-screen labor Silk-screen overhead Selling and administrative expenses Payment for equipment purchase Total disbursements Excess deficiency) of available cash over disbursements Financing Borrowings Ending cash balance 12. Using the information contained in the case and the previous budgets, prepare a budgeted balance sheet for Screenshot Tops, Inc. at December 31, 20xx. Screenshot Tops, Inc Budgeted Balance Sheet December 31, 20xx Assets Cash Accounts receivable Shirt inventory Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Interest payable Taxes payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 13. Using the information contained in the case and the previous budgets, a) calculate the estimated contribution margin per unit for 20xx. (Hint: Silk-screened labor and the taxes are both fixed costs.) b) Calculate the total estimated fixed costs for 20xx (including interest and taxes). c) Compute the break-even point in units and dollars for 20xx. 14. Michael is very disappointed that the company did not have an income of $25,000 for its first year of budgeted operations as he had wanted. How many shirts would the company have had to sell in order to have a pretax profit of $25,000? (Ignore changes in income tax expense.) 15. Why does the company's cash balance differ from the net income for the year? 16. Do you think it was a good idea to offer Cary a salary plus 10% of sales? Why or why not? What other thoughts do you have? "Screenshot Tops, Inc." Case Study 150 Points Requirements: 1. Think of this as a presentation to a bank or a supervisor at work 2. The final product that you turn in should be professional: a. All budgets and schedules should be formatted correctly with proper headings b. Each budget should have its own tab in the excel Workbook. C. Schedules and answers should be free from math, spelling and grammatical errors d. Final submission should look good and be very readable (groupings, commus, underlines, tables, etc.) t. We will follow the format discussed in the formatting guidelines included in this document. 3. There are definite solutions to each part of the case study, answers must be correct To assist you, the following check figures are provided. Check Figures: Total sales $ 800,000 Total collections $ 742,400 Total purchases $ 545,000 Total payments $ 464,000 Total labor hours 6,000 Total fixed selling and admin $ 23,280 Total variable overhead $ 46,650 Income before taxes $ 24,670 Ending cash $ 20,380 Total assets $ 137,270 Your calculations/final numbers should match those above. You will lose major points for incorrect amounts, or if you fail to have the supporting formulas (simply keying in the above numbers will not result in awarding of associated points). You should also link your schedules to previous schedules where appropriate. 4. This project must be completed in Excel, with narrative answers (question #1) provided in Word. (You cannot use the Apple apps Pages and Numbers or other software programs. Microsoft Office 365, which includes Word and Excel is available for free to college students - see the start here section in D2L) 5. Question #1 in the narrative will be answered in MS Word, You will have a separate tab for each question numbers 2-12. You will complete questions 13-16 on a single tab with each question and answer clearly labeled and separated. 6. As noted in item 3 above, you must use formulas where formulas would logically occur, as well as correct formats, underlining, etc. in your worksheets. You should link those portions of the worksheet to the previous sections as support and build supporting calculation formulas as needed. Failure to use formulas and proper linkage will result in the loss of points 7. You may work on this in a group or on your own. If you work in a group, each group member must fill out a peer evaluation form and your grade will be based on your effort put forth by you as an individual member according to your peers. No single team member's grade can exceed the group grade; however, individual grades can be awarded fewer points based on the feedback received. Formatting Guidelines: The dollar sign should appear only in the first entry in each column and not again until the total or subtotal line. Unless the initial number is not in dollars, in which case, when switching from units to dollars the dollar sign should be used. Use commas for numbers over 1,000, Use horizontal lines to separate headings from column entries and to highlight totals and subtotals (see Chapter 8 exhibits) Ensure that cells are formatted to the proper size for text to display fully in the cell. Be consistent about your use of decimal points. Either use them on all numbers in a table or don't use them at all. If you use decimal points, format to two decimal points All calculations not included in the budget/schedule (formula based) should be separated from the schedule clearly either to the right or below. Calculations (not contained within a formula in a schedule) must be clearly labeled and easy to follow