What is the maximum loan that the company will require

Assignment Help Cost Accounting
Reference no: EM13533338

Dan Barnes, financial manager of SKI casts, is requesting a line of credit from the company''s bank. The company has produced the following sales estimates: $71,218 in November, $68,212 in December, $65,213 in January, $52,475 in February, $42,909 in March, $30,524 in April, $44,567 in May,$54,590 in June, $62,341 in July, and $70,132 in August. Collection estimates are as follows: 20 percent within the month of sale, 70 percent in the month following the sale, and 10 percent in the second month following the sale. The company allows a 2 percent discount on payments made during the month of sales. Plaster supplies expense is estimated as 85 percent of sales two months from now. Other relevant information is as follows:

- Payments for plaster supplies is made during the month following the one in which these costs have been incurred.

- Wages and salaries will amount to approximately $6,691 in January, $5,471 in February, $4,316 in March, $3,126 in April, $4,511 in May, and $5,629 in June.

- Lease payments under long-term lease contracts will be $2,500 a month. 

- Depreciation charges will be $600 a month.

- Income tax payments of $8,000 will be due in March and June;

- A progress payment of $10,000 on a new building must be paid in April.

- Cash on hand on January 1 will amount to $3,000, and a minimum cash balance of $1,500 will be maintained throughout the cash budget period. 

a. What is the maximum loan that the company will require between January and June?

Reference no: EM13533338

Questions Cloud

The principal strains and the maximum engineering : The engineering strains at a point on a building frame weredetermined by means of FEM as
What percentage of the total disinfection power : When Cl2 gas is added to water during disinfection ofwater, it hydrolyzes with water to form HOCl. The power of acidHOCl is 88 times better than its conjugate base, OCl- .The pKa for HOCl is 7.5
What total amount of bond interest expense will be recognize : Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. The straight-line method is used to allo..
Kindschuh corporation is working on its direct labor budget : Construct the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month.
What is the maximum loan that the company will require : Wages and salaries will amount to approximately $6,691 in January, $5,471 in February, $4,316 in March, $3,126 in April, $4,511 in May, and $5,629 in June.
Do you agree or disagree with this quote : The Federal Reserve System is structured in such a way as to insulate monetary policy from the political pressures characteristic of the rest of our political system of representative democracy.
Define sodium bicarbonate and sodium carbonate dissolved : Sodium bicarbonate and sodium carbonate dissolved in water use to make buffer solution. The Ka value of carbonic acid is 4.37 x 10^-7 and sodium carbonate is 4.68 x 10^-11.
Explain what mass of pbso4 forms pb(no3)2 : What mass of PbSO4 forms when 1.25L of 0.0500M Pb(NO3)2 and 2.00L of 0.0250M NaSO4 are mixed
Define the preparation of solution : Describe the preparation of 1.5L of a 0.10M Ca(C2H3O2)2 solution. How many milliliters of the above solution would be needed to prepare 500mL of a 0.025M solution

Reviews

Write a Review

Cost Accounting Questions & Answers

  Gain realized on the sale of the assets

The gain realized on the sale of the assets and the balances in the partners-2019 capital accounts after the distribution of this gain or loss to the capital accounts.

  Prepare the journal entries to record the events

Prepare the journal entries to record the events and the issuance of the bonds.

  Grate care company specializes in producing products for

grate care company specializes in producing products for individual grooming. the company operates six divisions adding

  What cost amount of direct materials was charged

What cost amount of direct materials was charged to Job 3318 - Marys applies overhead to production at a predetermined rate of 80 percent based on direct labor cost.

  Prepare easy fictitious financial statements

Evaluate the detail information - Prepare easy fictitious financial statements and write notes for the fictitious annual report.

  Prepare the companys direct labor budget

Prepare the companys direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign i..

  Determine the present value of the lease payments

Determine the present value of the lease payments at June 30, 2013 (to the nearest $000) that Georgia-Atlantic uses to record the leased asset and lease liability.

  At the start of november penco refinery had work in process

at the start of november penco refinery had work in process inventory consisting of 4000 units that were 90 percent

  Evaluate the amount of cash expected to be collected in july

Evaluate the amount of cash expected to be collected in July

  Evaluate the relevant costs of old machine and new machine

Evaluate the relevant costs of the old machine and the new machine.

  Compute the adjusting entry for the inventory shrinkage

Jaguar Inc.'s perpetual inventory records indicate that $584,000 of merchandise should be on hand on July 31, 2007. The physical inventory indicates that $560,000 of merchandise is actually on hand.

  Abc wines company is considering the acquisition of a new

abc wines company is considering the acquisition of a new irrigation system for its extensive vineyards. the system

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd