Prepare three years of monthly cash budgets for company, Financial Accounting

1. Prepare three years of monthly cash budgets, yearly income statements, and yearly balance sheets for the jewelry business Daisy & Company.

General Information:

1. This is a family-run jewelry store.

2.  Assume it is a sole proprietorship, so there are no corporate taxes.  The income of the business is taxed as personal income to the business owner.

3. The physical location of the business is inside a shopping mall.  The company does not pay additional property taxes or any other associated fees except for monthly rent.  

Financial Information:

1. Sales forecasts for 2011 are listed below.

Month

Sales [in thousands]

January

$120

February

$200

March

$180

April

$200

May

$200

June

$210

July

$210

August

$220

September

$250

October

$280

November

$300

December

$350

2.  Assume sales are forecast to decrease by 5% annually from 2012 - 2013 due to the current economic climate. The seasonal sales pattern will still apply.

3.  An equity contribution of $100,000 cash was made at the start of the jewelry store.

4.  Employee Related Expenses: Assume that the jewelry store is open 12 hours each day X 363 days [4, 356 hours]. Daisy & Co. also employs individuals to work part-time at 6 hours each day X 363 days each year [2,178 hours].  Other employee related expenses are 5% of salaries and wages. Assume the total salaries and wages are paid on an equal monthly basis.

Owner's Salary

$125,000

1 Floor Manager

4,356 x $22.75 = $99,099

1 Purchasing Manager

4,356 x $17.25 = $75,141

2 Full-Time Sales Clerks

4,356 x $11.00 x 2 = $95,832

2 Part-Time Sales Clerks

2,178 x $9.75 x 2 = $42,471

1 Part-Time Purchasing Clerk

2,178 x $12.50 = $27,225

1 Cleaning Lady

$8,000

Total Salaries & Wages

$472,768

5. Daisy & Co. was issued a $500,000, 15-year loan, issued at 12.65% interest that required monthly payments.  The loan proceeds were used for:

Rental space remodel

$180,000

Initial inventory purchase

$320,000

6. The rental space remodel is attributed to furniture and fixtures that are being depreciated on a 5-year, straight-line basis.

Other Information:

1.  Daisy & Co. wishes to maintain a $35,000 minimum cash balance.

2.  Advertising and marketing related expenses are 2% of sales.

3.  COGS are 35% of sales. The company pays cash for inventory in the month of sale.

4.  Insurance expense is 1.5% of sales.

5.  Administrative expenses are 1.75% of sales

6.  Utilities and telephone are included in the monthly rent of $9,000.

7.  Bank charges are 1% of sales.

8.  Daisy & Co. has a 60-day credit policy. Approximately 30% of their customers pay on credit and the remainder pay in cash. Assume half of all of the customers who purchased on credit will pay within one month and the remainder will pay the following month.

9.   Additionally, operating expenses are 4.5% of sales.

Posted Date: 2/19/2013 1:19:36 AM | Location : United States







Related Discussions:- Prepare three years of monthly cash budgets for company, Assignment Help, Ask Question on Prepare three years of monthly cash budgets for company, Get Answer, Expert's Help, Prepare three years of monthly cash budgets for company Discussions

Write discussion on Prepare three years of monthly cash budgets for company
Your posts are moderated
Related Questions
Read Appendix B, "Sample Brief Memorandum," that starts on page 193 of the textbook. In 2-3 pages (12 point font, double spaced), critique the memorandum based on what we've learne

Distribution to a beneficiary Before distribution to a beneficiary, the investments will be re-valued and the profits or losses divided between the beneficiaries as follows:-

Q. Given the following data, what is net income?  (Note: Not all items shown below will be included in income.) Cost of Goods Sold 8 Accoun

Describe:- What are the limitations of the balance sheet? What are the benefits of the balance sheet? What are the form of the balance sheet?

petra corporation purchased P4,000 worth of merchandise on account terms 2/10, n?30, FOB shipping point. Prepaid transportation charges of P200 were added to the invoice.

Determine the accounting aspects of business Accounting scandals can have a profound effect on all those connected with business. Enron scandal, for instance, ultimately led t

Q. Explain Final Location Survey? A final Location Survey is under taken on the completion of traffic survey to select the final rout of the line to be constructed, taking into

What are some examples of co branded foods? is cool ranch doritos one?


Q. What is Short Sale? Short Sale - Sale of an item before it is purchased. A person entering into a short sale believes that the price of item will decline between date of the