Reference no: EM131394022

Cornerstone Exercise 1 - Sales Budget

FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick's best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:

Required:

1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. If required, round your answers to the nearest cent.

2. What if FlashKick added a third line-tournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of $45 each in January and February, and $48 each in March? Prepare a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. If required, round your answers to the nearest cent.

Cornerstone Exercise 2 - Production Budget

FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKick's best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following:

FlashKick requires ending inventory of product to equal 20 percent of the next month's unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls.

Required:

Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year.

A separate production budget is constructed for each product or service provided. The production budget depends on the unit sales shown in the sales budget. Units to be produced are calculated by considering beginning and ending (desired) inventory amounts and unit sales.

Cornerstone Exercise 3 - Algorithmic

Cash Receipts Budget and Accounts Receivable Aging Schedule

Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales:

In Shalimar's experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $4,960,000 and for the fourth quarter of the current year are $6,860,000.

Required:

1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year.

2. Construct a cash receipts budget for Shalimar Company for each quarter of the next year, showing the cash sales and the cash collections from credit sales. If an amount is zero, enter "0".