Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Splish Instruments, a rapidly expanding electronic parts distributor, is formulating its plans for 2022. Steven Garcia, the firm's directo of marketing, has completed his 2022

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Splish Instruments, a rapidly expanding electronic parts distributor, is formulating its plans for 2022. Steven Garcia, the firm's directo of marketing, has completed his 2022 forecast and is confident that the company will meet or exceed sales estimates. The following sales figures show the growth that is expected and are the basis for planning in the other corporate departments: 6. Splish makes income tax payments in the first month of each quarter based on income for the prior quarter. The tax rate is 30%. The net income for the first quarter of 2022 is projected to be $885,000. 7. Splish has a corporate policy of maintaining an end-of-month cash balance of $236,000. It invests or borrows cash monthly, as necessary, to maintain this balance. 8. Splish uses a calendar-year reporting period. Prepare aschedule of Cash Receipts and Disbursements for Splish Instruments, by month, for the second quarter of 2022. Be sure that all receipts, disbursements, borrowing, and investing amounts are presented on a monthly basis. Ignore the interest expense and income from borrowing and investing (Round answers to 0 decimal places, eg. 125.) \begin{tabular}{lrlr} Month & Forecast Sales & Month & Forecast Sales \\ \hline January & $3,304,000 & July & 4,720,000 \\ February & 3,540,000 & August & 4,720,000 \\ March & 3,304,000 & September & 4,956,000 \\ April & 3,776,000 & October & 4,956,000 \\ May & 4,130,000 & November & 4,720,000 \\ June & 4,484,000 & December & 5,192,000 \end{tabular} Brian Lewis, assistant controller, is responsible for the cash flow projection, a critical element during a period of rapid expansion. She will use the following information in preparing her cash analysis: 1. Splish has experienced an excellent record in accounts receivable collection and expects this trend to continue. The company collects 50% of billings in the month after the sale and 50% in the second month after the sale. Uncollectible accounts are nominal and can be ignored in the analysis. 2. The purchase of electronic parts is Splish's largest expenditure; the cost of these items is equal to 60% of sales. Splish receives 40% of the parts one month before it sells them and 60% during the month of sale. 3. Historically, Splish has cleared 60% of the accounts payable one month after it receives its purchases, and the remaining 40% two months after. 4. Hourly wages, including fringe benefits, depend on the sales volume; they are equal to 20% of the current month's sales. The company pays these wages in the month incurred. 5. General and administrative expenses are projected to be $3,245,000 for 2022 . The composition of these expenses is given below. The company incurs all of these expenses uniformly throughout the year, except for property taxes. It pays the property taxes in four equal instaiments in the last month of each quarter: Splish Instruments, a rapidly expanding electronic parts distributor, is formulating its plans for 2022. Steven Garcia, the firm's directo of marketing, has completed his 2022 forecast and is confident that the company will meet or exceed sales estimates. The following sales figures show the growth that is expected and are the basis for planning in the other corporate departments: 6. Splish makes income tax payments in the first month of each quarter based on income for the prior quarter. The tax rate is 30%. The net income for the first quarter of 2022 is projected to be $885,000. 7. Splish has a corporate policy of maintaining an end-of-month cash balance of $236,000. It invests or borrows cash monthly, as necessary, to maintain this balance. 8. Splish uses a calendar-year reporting period. Prepare aschedule of Cash Receipts and Disbursements for Splish Instruments, by month, for the second quarter of 2022. Be sure that all receipts, disbursements, borrowing, and investing amounts are presented on a monthly basis. Ignore the interest expense and income from borrowing and investing (Round answers to 0 decimal places, eg. 125.) \begin{tabular}{lrlr} Month & Forecast Sales & Month & Forecast Sales \\ \hline January & $3,304,000 & July & 4,720,000 \\ February & 3,540,000 & August & 4,720,000 \\ March & 3,304,000 & September & 4,956,000 \\ April & 3,776,000 & October & 4,956,000 \\ May & 4,130,000 & November & 4,720,000 \\ June & 4,484,000 & December & 5,192,000 \end{tabular} Brian Lewis, assistant controller, is responsible for the cash flow projection, a critical element during a period of rapid expansion. She will use the following information in preparing her cash analysis: 1. Splish has experienced an excellent record in accounts receivable collection and expects this trend to continue. The company collects 50% of billings in the month after the sale and 50% in the second month after the sale. Uncollectible accounts are nominal and can be ignored in the analysis. 2. The purchase of electronic parts is Splish's largest expenditure; the cost of these items is equal to 60% of sales. Splish receives 40% of the parts one month before it sells them and 60% during the month of sale. 3. Historically, Splish has cleared 60% of the accounts payable one month after it receives its purchases, and the remaining 40% two months after. 4. Hourly wages, including fringe benefits, depend on the sales volume; they are equal to 20% of the current month's sales. The company pays these wages in the month incurred. 5. General and administrative expenses are projected to be $3,245,000 for 2022 . The composition of these expenses is given below. The company incurs all of these expenses uniformly throughout the year, except for property taxes. It pays the property taxes in four equal instaiments in the last month of each quarter

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Sector Accounting Auditing And Control In South Eastern Europe

Authors: Vesna Vašiček, Gorana Roje

1st Edition

303003352X, 978-3030033521

More Books

Students also viewed these Accounting questions