Reference no: EM13884703
Problem-
The board of directors of Gladiator Robotics is considering whether or not to donate to a national robotics convention for high school students interested in technology and engineering. The company needs you to prepare a monthly cash budget to determine the available cash reserves for January, February, and March. Relevant data appear below.
|
|
October
actual
|
November
actual
|
December
actual
|
January
|
February
|
March
|
|
Sales
|
$300,000
|
$325,000
|
$450,000
|
$310,000
|
$350,000
|
$400,000
|
All sales are on account. Collections are expected to be 60% in the month following the sale, 25% in the second month following the sale, and 10% in the third month following the sale. Five percent are deemed to be uncollectible. The company sold equipment in February for $20,000 and received a dividend on investments of $4,000 in March. Cash on hand as of January 1st is $14,000.
Material purchases are as follows:
|
October
|
November
|
December
|
January
|
February
|
March
|
|
$80,000
|
$85,000
|
$105,000
|
$80,000
|
$88,000
|
$92,000
|
Material purchases are paid 50% in the month purchased and the remainder in the following month.
Other disbursements are paid in the month incurred.
|
|
January
|
February
|
March
|
|
Labor and wages
|
150,000
|
185,000
|
215,000
|
|
Selling costs
|
62,000
|
68,000
|
78,000
|
|
G & A costs
|
30,000
|
31,000
|
38,000
|
|
Income taxes
|
|
|
32,000
|
|
Capital equipment
|
50,000
|
|
|
The company wants to maintain a cash balance at the end of each month of at least $10,000. It has a $250,000 line of credit at the bank and will borrow from the bank in order to maintain this balance.
Part I: Prepare a monthly cash budget for January, February, and March.
Part II: Analyze the cash budget and make recommendations to the board of directors of Gladiator Robotics regarding your findings. Be specific regarding possible causes and remedies
Part III: What if any concerns do you have about the ability to make the donation? Also, do you have any concerns about cash on hand which might impact variable HR expenses such as recruitment costs or other commitments to employees including staffing, development or rewards? Be specific.
Additional information-
This problem relates to Basic Accounting and it preparing a cash budget for an organization and making recommendations based on the review of the cash budget.
|
What is the flexible budget formula for factory overhead
: What is the flexible budget formula for factory overhead? As a HR manager, how might you make use of this information in the decisions being made about employee headcount - including hiring and staffing choices
|
|
What is humes attack against causation
: What is Humes attack against causation - why does the version of Consequentialism, Ethical Egoism, not meet the Moral Criteria of Adequacy?
|
|
Explain in your own words what the israeli-palestinian
: Explain in your own words what the Israeli-Palestinian conflict is all about. Using just war principles or other ethical tools, explain some of the ethical flaws you see in each party, at any time in history but particularly starting with the 1967 wa..
|
|
Compare and contrast the following ecology terms
: Compare and contrast the following ecology terms. Think about how they are related and how they differ. Once you have read the chapter, add an example of each term or use them together in a coherent sentence.
|
|
Prepare a monthly cash budget for january and february
: Prepare a monthly cash budget for January, February, and March. Analyze the cash budget and make recommendations to the board of directors of Gladiator Robotics regarding your findings
|
|
Discuss villegass profitability and liquidity
: Use (a) liquidity analysis and (b) profitability analysis to document Villegas's financial position. Discuss Villegas's profitability and liquidity. Do you think it will qualify for a bank loan?
|
|
The spot exchange rate
: The treasurer of a major U.S. firm has $40 million to invest for three months. The interest rate in the United States is .28 percent per month. The interest rate in Great Britain is .32 percent per month. The spot exchange rate is £.639, and the thre..
|
|
Find the angular speed of the rotor
: Determine the amount of grass seed that needs to be purchased, the owner has to know the area of the yard. Find the area of the yard to the nearest square foot - Find the angular speed of the rotor.
|
|
Colorado company has decided to use the loss
: Colorado Company has decided to use the loss carryback and carryforward provision as a result of the year 2017 loss. The enacted tax rate remains at 40% after year 2017. Colorado Company has determined that a valuation allowance is not necessary.
|