Ask Basic Finance Expert

Juicers Inc produces multiple fruit juices for the Caribbean market. You have been given responsibility forall planning and budgeting. The next operational planning meeting is two weeks away and they would likea master budget prepared for the next three months on the planning horizon. The accounting department hasprovided the following information. The company has a requirement that minimum cash balance of $40,000 each month. The juices are sold at$8 per liter. Recent forecast sales in units are as follows:January (actual) 80,000 June 240,000February (actual) 96,000 July 160,000March (actual) 112,000 August 144,000April 140,000 September 128,000May 180,000The large build up in sales before and up to the month of June is in preparation for the annual carnival.Ending inventories are supposed to be 80% of the next month sales in units. The juices cost $ 5. per unit toproduce.Purchases are paid for as follows, 50% in the month of purchase and the remaining 50% in the followingmonth. All sales are on credit with no discounts. The cash from the collection of sales is as follows, 25% iscollected in the month of sale, 50% one month later and the remaining 25% is collected 2 months after sale.The other operating expenses are as follows:VariableSales commissions $1 per juiceFixedSalaries and wages $88,000Utilities 56,000Insurance expired 4,800Depreciation 6,000Miscellaneous 12,000All operating expenses are paid in the month in cash except depreciation and insurance expired. Land ispurchased in May for $100,000. The company pays dividends the first month of each quarter of $48,000which were declared in the last month of the previous quarter. The unaudited balance sheet at the end of thelast quarter which ended March 31st 2012 is shown below.2AssetsCash $ 56,000Accounts receivable ($192,000 of February sales,$672,000 of March sales)864,000Inventory (126,000 units) 630,000Unexpired Insurance 57,600Fixed Assets (net of depreciation) 690,800Total Assets $2,298,400Liabilities and Stockholders' EquityAccounts payable purchases 343,000Dividend payable 48,000Capital stock 1,200,000Retained Earnings 707,400Total Liabilities and Stockers' equity $2,298,400The company can borrow money at 12% per annum interest rate. All borrowings must be at the beginningof the month and all repayments occur at the end of the month. Borrowing and repayment of principal mustbe in increments of $1,000.Prepare a master budget for the three months period ended June 30th 2012, including the following detailedbudgets:1. a) Sales budget by month and in totalb) A schedule of expected sales collection from sales and accounts receivable by month and intotalc) A purchases budget in units and in dollars. Show the budget by month and in total.d) A schedule of budgeted cash disbursement for purchases by month and in total.2. A cash budget. Show the budget by month and in total.3. A budgeted income statement for the three month period ended June 30th 2012. Use thecontribution margin format.4. A budgeted balance sheet as at June 30th 2012.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M9793830
  • Price:- $50

Priced at Now at $50, Verified Solution

Have any Question?


Related Questions in Basic Finance

Question utilizing the concepts learned throughout the

Question: Utilizing the concepts learned throughout the course, write a Final Paper on one of the following scenarios: • Option One: You are a consultant with 10 years experience in the health care insurance industry. A ...

Discussion your initial discussion thread is due on day 3

Discussion: Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates. Your grade will reflect both the quality of your initial post and the depth of your r ...

Question financial ratios analysis and comparison

Question: Financial Ratios Analysis and Comparison Paper Prior to completing this assignment, review Chapter 10 and 12 in your course text. You are a mid-level manager in a health care organization and you have been aske ...

Grant technologies needs 300000 to pay its supplier grants

Grant Technologies needs $300,000 to pay its supplier. Grant's bank is offering a 210-day simple interest loan with a quoted interest rate of 11 percent and a 20 percent compensating balance requirement. Assuming there a ...

Franks is looking at a new sausage system with an installed

Franks is looking at a new sausage system with an installed cost of $375,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped ...

Market-value ratios garret industries has a priceearnings

(?Market-value ratios?) Garret Industries has a? price/earnings ratio of 19.46X a. If? Garret's earnings per share is ?$1.65?, what is the price per share of? Garret's stock? b. Using the price per share you found in par ...

You are planning to make annual deposits of 4440 into a

You are planning to make annual deposits of $4,440 into a retirement account that pays 9 percent interest compounded monthly. How large will your account balance be in 32 years?  (Do not round intermediate calculations a ...

One year ago you bought a put option on 125000 euros with

One year ago, you bought a put option on 125,000 euros with an expiration date of one year. You paid a premium on the put option of $.05 per unit. The exercise price was $1.36. Assume that one year ago, the spot rate of ...

Common stock versus warrant investment tom baldwin can

Common stock versus warrant investment Tom Baldwin can invest $6,300 in the common stock or the warrants of Lexington Life Insurance. The common stock is currently selling for $30 per share. Its warrants, which provide f ...

Call optionnbspcarol krebs is considering buying 100 shares

Call option  Carol Krebs is considering buying 100 shares of Sooner Products, Inc., at $62 per share. Because she has read that the firm will probably soon receive certain large orders from abroad, she expects the price ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As