Make an operating budget, Purpose a cash Budget for the

Make an operating budget

Assignment Help Financial Accounting

Reference no: EM1312301

Prepare a cash Budget for the first two quarters

Terry's Equipment Center has been organized to sell a line of lawn and garden equipments. The company began operations on January 1 with the following assets.

Cash - $14,000
Inventory - 29,000
Land - 31,000
Buildings and equipments - $250,000
(Useful life 20 years, no residual value, of which $210,000 relates to selling and $40,000 to general and administrative activities)

Sales for January, February, and March (i.e., the first quarter) are expected to $140,000; they are expected to be $280,000 for the next three months, and $325,000 the three months after that. Certain expenses are expected to vary with sales as follows:

	Percent of Sales Dollars
Cost of goods sold	60
Bad debts	2
Variable selling expenses	14
Variable administrative expenses	5

Other expenses not expected to vary with sales:

Selling	$25,000 per quarter
Administrative	18,550 per quarter
Depreciation	3,125 per quarter

Required:
Prepare an operating budget for the first and second quarters of operations of Terry's Equipment Center.

Reference no: EM1312301

Questions Cloud

Discuss the capital structure of the firm : Discuss the capital structure of the firm and What conclusions can you draw from this example regarding the use of debt

Basics of biostatistics. : While discussing their findings, authors have ignored a main threat to the validity of their estimates of the exposure. Explain and discuss this error.

Fail to make your payments to tv land : If you fail to make your payments to TV Land, do they have a claim to your Calculate. Does TV Land or Calculate Land have to file a financing statement.

Identify the amounts of labor : Find the following: First solve this problem using an Excel spreadsheet approach and then do the problem using the optimization procedure; compare the answers for the two methods.

Make an operating budget : Purpose a cash Budget for the first two quarters and make an operating budget for the first and second quarters of operations of Terry's Equipment Center.

Probability based on coin tossing experiment : A coin is flipped e times and heads (h) or tails (t) are recorded:

Compute earnings per share : Compute earnings per share EPS under each of the three economic scenarios assuming that the firm goes through with the recapitalization

Mutually exclusive or not mutually exclusive events : Decide if the events A and B are mutually exclusive or not mutually exclusive. A card is drawn from standard deck of 52 playing cards.

Trade versus protecting domestic marketplaces : Illustrate what are your views on free trade versus protecting domestic marketplaces through tariffs also import restrictions.

User Account

All Pages