The following is PDC Company sales projection from December 2018 - July 2019:

Based on the information above and some additional information below, do it

following instructions:

a. Suppose that the beginning December 2018 inventory is $ 135,600 and the ending inventory on December

2018 is $ 152,400, so show me the preparation of a sales schedule, purchase schedule,

wages and commissions schedule, and cash budget from January - June 2019.

b. Here is some additional information about the PDC Company. prepaid insurance for January 2019 is $ 5,520. Value of fixed assets (equipment,

fixture & others) December 2018 was $ 92.000. PDC Company decided none

purchase of fixed assets during January - June 2019. Accumulated depreciation on December

2018 is $ 39,790. December 2018's common stock (owner's equity) was $ 184,357.

The number of common shares from January to April 2019 is calculated by adding up

previous month's common stock with the current month's net income.

Several occurence resulted in the value of the May 2019 common stock to be $ 13,625

and the value of the common stock for June 2019 was $ 37,155. Suppose the PDC Company set

the amount of the loan as below:

Then compile the projected income statement and balance sheet for January - June 2019 with reference

in the additional information in point b and the information in the question narrative.

c. Based on the answers in points a and b, compare the cash projection conditions in table 6.2 with

the results of your calculations. Do an analysis of the things that cause change

PDC Company's cash condition.

d. Based on the answers to points a & b, provide predictions about the PDC Company's sustainability of business life. Also give recommendations to the PDC Company so that they can survive

live with the financial conditions they face.

Dec-18 $ Jan-19 $ Feb-19 $ Mar-19 $ Apr-19 $ May-19 $ Jun-19 $ Jul-19 $ 160.000 700.000 900.000 1.000.000 1.100.000 1.400.000 1.500.000 1.700.000 Here is an information regarding the relevant PDC company policies Short-term cash planning and financial report projections. PDC company sales have a composition of 60% in the form of cash sales while 40% in the form of credit sales. Credit sales will be paid off by consumers in the following month after they made a purchase at the PDC Company. The cost of goods sold amounting to 70% of the projected sales of the current month. Policy ending inventory per month: projected sales for the next month x 80% x 70% + safety stock for $ 45,000. This policy was taken so that the PDC Company's ending inventory was able cover the beginning of the following month by 80%, able to cover the cost of goods sales of 70%, and kept $ 45,000 in safety stock at the end of each month. Payment for the purchase of raw materials is divided into two periods. 50% paid in months this and the balance is paid in the following month. The basic salary for employees is fixed every month That is, $ 5,750, while the commission is paid on the basis of 15% of that month's sales running (current month). The total salary and commission is paid twice. Total salary and commission for the month the current component consists of 50% salary and commission for the month and 50% paid off salary and commission previous month. Miscellaneous expense is set at 5% of the amount projected sales for the current month.. The building rent is fixed at a monthly rate of $4,600. In the period January - June 2019 PDC The company decided not to buy trucks (fixed assets) anymore. Loan interest 1.5% per month applies. Payment of loan installments and interest is made at the end month. Depreciation expense is $ 1,150 per month. Insurance expense per month is $ 460. PDC Company prepaid insurance, the balance is deducted automatically per month for $ 450. After the insurance balance is prepaid the value is 0, the new PDC company will make insurance repayments for 1 year. For the sake of simplicity of calculation, hence tax calculations are not included in this case study. 2019 January $ February $ March $ April $ May $ June $ 15.608 310.158 284.757 294.607 50.000 50.000 Table 6.2 PDC Company Operating Schedules and Cash Budget (A) SALES SCHEDULE APRIL TO JULY JULY AUGUST 92.000 552,000 MARCH 92,000 36,800 55,200 APRIL 115,000 46,000 69,000 MAY 184,000 73.600 110,400 JUNE 138,000 55,200 82,800 115,000 46,000 69,000 Schedule 1: Sales Forecast Credit sales, 40% Cash sales, 60% Schedule 2 Cash Collections Cash sales this month 100% of last month's credit sales Total collections 69,000 110,400 82,800 69,000 35,800 105,800 46,000 156,400 73,600 156,400 55 200 124.200 (B) PURCHASES SCHEDULE MARCH APRIL MAY APRIL TO JULY JUNE JULY 386,400 Schedule 3. Purchases Ending inventory Cost of goods sold Total needed Beginning inventory Purchases Schedule 4 Purchase Disbursements 50% of last month's purchases 50% of this month's purchases Disbursements for purchases 110,400 64.400 174,800 - 97,520 77,280 149,040 80.500 229,540 - 10,400 119,140 123,280 128.800 252,080 -9,040 103,040 110,400 96,600 207,000 --23,280 83,720 97,520 80.500 178,020 - 10.400 67.620 38,540 59,570 98,210 59,570 51,520 111.090 51,520 41 860 93,380 41,860 33 810 75,670 (C) WAGES AND COMMISSIONS SCHEDULE MARCH APRIL TO JULY APRIL MAY JUNE JULY 5,750 5,750 5,750 5,750 5,750 Schedule 5: Wages and Commissions Wages, all ficed Commissions (15% of current sales) Total Schedule 6: Disbursements Wages and Commissions 50% of last month's expenses 50% of this month's expenses Total 13.800 19,550 17.250 23,000 27,600 33,350 20,700 26,450 17.250 23,000 105,800 9,775 11500 21,275 11,500 16,675 28,175 16,675 13,225 29.900 13,225 11,500 24,725 Table 6.2 PDC Company Operating Schedules and Cash Budget (Continued APRIL (D) CASH BUDGET MAY 23,000 23,000 JUNE 23,000 JULY 23,000 105,800 128,800 156,400 179,400 156,400 179,400 124,200 147,200 75,670 24,725 5,750 4,600 Beginning cash balance Cash receipts: Collections from customers Total cash available for needs before financing Cash disbursements: Merchandise Wages and commissions Miscellaneous expenses Rent Truck purchase Total disbursements Minimum cash balance desired Total cash needed Excess of total cash Financing New borrowing Repayments Loan balance Interest Total effects of financing Cash balance 98,210 21,275 5,750 4,600 6.900 136,735 23.000 159,735 -30,935 111,090 28,175 9,200 4.600 0 153,065 23,000 176,065 3,335 93,380 29,900 6,900 4,600 0 134,780 23,000 157,780 21,620 110,745 23.000 133,745 13,455 30,935 30,935 0 30,935 23,000 0 2,871 28,064 464 -3,335 23,000 0 21,199 6,865 421 -21,620 23,000 6,865 0 103 -6,968 29,487 Dec-18 $ Jan-19 $ Feb-19 $ Mar-19 $ Apr-19 $ May-19 $ Jun-19 $ Jul-19 $ 160.000 700.000 900.000 1.000.000 1.100.000 1.400.000 1.500.000 1.700.000 Here is an information regarding the relevant PDC company policies Short-term cash planning and financial report projections. PDC company sales have a composition of 60% in the form of cash sales while 40% in the form of credit sales. Credit sales will be paid off by consumers in the following month after they made a purchase at the PDC Company. The cost of goods sold amounting to 70% of the projected sales of the current month. Policy ending inventory per month: projected sales for the next month x 80% x 70% + safety stock for $ 45,000. This policy was taken so that the PDC Company's ending inventory was able cover the beginning of the following month by 80%, able to cover the cost of goods sales of 70%, and kept $ 45,000 in safety stock at the end of each month. Payment for the purchase of raw materials is divided into two periods. 50% paid in months this and the balance is paid in the following month. The basic salary for employees is fixed every month That is, $ 5,750, while the commission is paid on the basis of 15% of that month's sales running (current month). The total salary and commission is paid twice. Total salary and commission for the month the current component consists of 50% salary and commission for the month and 50% paid off salary and commission previous month. Miscellaneous expense is set at 5% of the amount projected sales for the current month.. The building rent is fixed at a monthly rate of $4,600. In the period January - June 2019 PDC The company decided not to buy trucks (fixed assets) anymore. Loan interest 1.5% per month applies. Payment of loan installments and interest is made at the end month. Depreciation expense is $ 1,150 per month. Insurance expense per month is $ 460. PDC Company prepaid insurance, the balance is deducted automatically per month for $ 450. After the insurance balance is prepaid the value is 0, the new PDC company will make insurance repayments for 1 year. For the sake of simplicity of calculation, hence tax calculations are not included in this case study. 2019 January $ February $ March $ April $ May $ June $ 15.608 310.158 284.757 294.607 50.000 50.000 Table 6.2 PDC Company Operating Schedules and Cash Budget (A) SALES SCHEDULE APRIL TO JULY JULY AUGUST 92.000 552,000 MARCH 92,000 36,800 55,200 APRIL 115,000 46,000 69,000 MAY 184,000 73.600 110,400 JUNE 138,000 55,200 82,800 115,000 46,000 69,000 Schedule 1: Sales Forecast Credit sales, 40% Cash sales, 60% Schedule 2 Cash Collections Cash sales this month 100% of last month's credit sales Total collections 69,000 110,400 82,800 69,000 35,800 105,800 46,000 156,400 73,600 156,400 55 200 124.200 (B) PURCHASES SCHEDULE MARCH APRIL MAY APRIL TO JULY JUNE JULY 386,400 Schedule 3. Purchases Ending inventory Cost of goods sold Total needed Beginning inventory Purchases Schedule 4 Purchase Disbursements 50% of last month's purchases 50% of this month's purchases Disbursements for purchases 110,400 64.400 174,800 - 97,520 77,280 149,040 80.500 229,540 - 10,400 119,140 123,280 128.800 252,080 -9,040 103,040 110,400 96,600 207,000 --23,280 83,720 97,520 80.500 178,020 - 10.400 67.620 38,540 59,570 98,210 59,570 51,520 111.090 51,520 41 860 93,380 41,860 33 810 75,670 (C) WAGES AND COMMISSIONS SCHEDULE MARCH APRIL TO JULY APRIL MAY JUNE JULY 5,750 5,750 5,750 5,750 5,750 Schedule 5: Wages and Commissions Wages, all ficed Commissions (15% of current sales) Total Schedule 6: Disbursements Wages and Commissions 50% of last month's expenses 50% of this month's expenses Total 13.800 19,550 17.250 23,000 27,600 33,350 20,700 26,450 17.250 23,000 105,800 9,775 11500 21,275 11,500 16,675 28,175 16,675 13,225 29.900 13,225 11,500 24,725 Table 6.2 PDC Company Operating Schedules and Cash Budget (Continued APRIL (D) CASH BUDGET MAY 23,000 23,000 JUNE 23,000 JULY 23,000 105,800 128,800 156,400 179,400 156,400 179,400 124,200 147,200 75,670 24,725 5,750 4,600 Beginning cash balance Cash receipts: Collections from customers Total cash available for needs before financing Cash disbursements: Merchandise Wages and commissions Miscellaneous expenses Rent Truck purchase Total disbursements Minimum cash balance desired Total cash needed Excess of total cash Financing New borrowing Repayments Loan balance Interest Total effects of financing Cash balance 98,210 21,275 5,750 4,600 6.900 136,735 23.000 159,735 -30,935 111,090 28,175 9,200 4.600 0 153,065 23,000 176,065 3,335 93,380 29,900 6,900 4,600 0 134,780 23,000 157,780 21,620 110,745 23.000 133,745 13,455 30,935 30,935 0 30,935 23,000 0 2,871 28,064 464 -3,335 23,000 0 21,199 6,865 421 -21,620 23,000 6,865 0 103 -6,968 29,487