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Accounting

1. Create income statement, balance sheet, and statement of cash flow from following information.
2. What recommendation should be made to the controller?

	January	February	March
Sales	$450,000	$550,000	$700,000
Manufacturing costs	$260,000	$330,000	$420,000
Selling and administrative expenses	$100,000	$140,000	$45,000
Capital expenditures	-	-	-

Cash Budget	January	February	March
Cash sales	$9,000	$11,000	$14,000
Collections form account receivable	$23,000	$33,000	$42,000
Dividends	$2,000
Total Cash Receipts	$34,000	$44,000	$56,000

Estimated cash payments
Manufacturing costs	($216,000)	($283,000)	($371,000)
Selling and administrative expenses	($100,000)	($140,000)	($150,000)
Capital expenditures			($45,000)
Note payable including interest			($51,000)
Income tax		($15,000)
Dividend			($5,000)
Total Cash Payments	($316,000)	($438,000)	($622,000)

Cash increase (decrease)	$2,400	$200	($6,200)
Cash balance beginning	$4,500	$6,900	$7,100
Cash balance ending	$6,900	$7,100	$900
Maximum cash balance	$3,500	$3,500	$3,500
Excess (Deficiency)	$3,400	$3,600	($2,600)

Current assets	January 1
Cash	$45,000
Marketable securities	$65,000
Accounts receivable	$290,000
	$400,000

Current liabilities
Notes payable	$50,000
Accounts payable	$18,000


Dividend recorded in January	$20,000
Tax payment in February	$15,000
Dividend payment in February	$5,000
Minimum cash balance	$35,000

Collections	January	February	March
November sales	$50,000
December sales	$180,000	$60,000
January sales	$90,000	$27,000	$90,000
February sales		$110,000	$330,000
March sales			$140,000
Total collections	$320,000	$440,000	$560,000
Cash collections	$90,000	$110,000	$140,000
Cash from receivables	$230,000	$330,000	$420,000

Manufacturing costs	$260,000	$330,000	$420,000
Depreciation, insurance, & property tax	$40,000	$40,000	$40,000
Net manufacturing costs	$220,000	$290,000	$380,000
December costs	$18,000
January costs	$198,000	$22,000
February costs		$261,000	$29,000
March costs			$34,200
Total manufacturing payments	$216,000	$283,000	$371,000

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9952084

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