University of California Estimated Income Stement for Easy Turn Tony Excel Task

User Generated

666888_

Business Finance

University Of California Los Angeles

Description

Unformatted Attachment Preview

=ycol Easy-Turn Toy Company Balance Sheet March 31, 1985 $3,580 $94,200 5,400 MR = 88,800 Cash in bank Accounts Receivable Allowance for Uncollectibles Inventories Safety Stock Finished Goods Prepaid Insurance Plant and Equipment Allowance for Depreciation 30,000 42,000 72,000 2,100 190,000 3,000 187,000 $353,480 Total Assets Liabilities Factory wages and salaries Sales Commission and expense Administration costs accured Accured property taxes Accounts payable (Power) Interest payable Income taxes payable Notes Payable (6%) 5 Year Capital Stock Retained Earnings $23,500 10,000 2,000 3,000 2,000 750 6,115 50,000 250,000 6,115 Total Liabilities and Equity $353,480 e Easy-Turn Toy Company Income Statement Quarter ended March 31, 1985 I. 2nd Quarter lended June 30 Revenue Sales) 140.000 Gross: billing (90,000 units at $3 each) Less: Provisions for uncollectible acc. Discount taken by customers 350.000 $270,000 $5,400 1,620 7,020 $262,980 $110,000 88,000 Revenue from operations Beginning Inversion @ 2.10 = Expenses Factory cost of goods (110,00 units produced) Materials appropriated to production Direct labor costs incurred Factory overhead Variable costs: Indirect labor (6% Power 14% Supplies, Misc. 16% Fixed costs: Supervision Property taxes Depreciation Insurance Miscellaneous 22,000 $11,000 4,400 6,600 6,000 3,000 3,000 300 2,700 15,000 Total factory costs incurred Less: Unsold inventory of finished goods 20,000 @ 2.10 Factory cost of goods sold $235,000 42,000 $ 193,000 45,000 12,000 $250,000 $ 12,980 Selling expenses (which vary proportionately with sales) Administration costs and expenses (fixed) Total expenses Net margin from operations Interest Earnings before taxes Income taxes Net Profits 750 # 12,230 6,115 6,115 Materials are purchased each month for production and they are paid in the month in which they are purchased. A safety stock of raw materials is kept on hand to furnish a 30,000 unit production if needed. Cost of supplies and miscellaneous variable and fixed factory costs are paid in the month in which those costs are incurred. Direct labor, indirect labor, and supervision costs make up the total factory payroll. These, as well as selling commissions and expense and all administration costs, are paid half in the month in which they are incurred, half in the following month. Power bills are paid in full in the month after they are incurred. Property taxes are paid quarterly and a disbursement of $3,000 will be made for these in April and July. The company has an arrangement by which it may borrow up to $20,000 for not longer than 60 days from the Roger County Bank; the bank charges interest at 6 percent per year on such loans, payable at the maturity of the loan. A cash balance of $40,000 4.000. must be maintained. No more cash is to be borrowed than is necessary to maintain this balance, but loans are made only in full thousands of dollars. Prepare: (a) An estimated income statement showing the effects of the expected transactions for the second quarter and third quarter. (b) Forecasts of collections from accounts receivable by months and of disbursements by months. (c) A summary cash statement, showing the amount of bank loans and the repayment of them; this statement should also show the expected cash balance at September 30. (d) An estimated balance sheet showing the expected financial position of the Illinois Novelty Company at September 30. (e) Upon completion, you will have three income statements and two balance sheets. Make a complete comparative financial analysis involving these four statements. Corporation Finance Easy Turn Toy Company Easy-Turn is a company that manufactures and sells a particular type of toy to manufacturers. It has been in business three months and finds itself with more orders taken than it has the funds to produce the goods on order. The company realizes that it must find a source of financing and convince this source that the company has a bright future and that a good source of short-term credit would be the missing ingredient to make this company a success. NIEBIE The company's sales for the first quarter have been 20,000 for January, 30,000 units for February, and 40,000 units for March. The selling price of the good is $3 per unit and is sold to its customers offering a discount if paid within the period from sale to the end of month or net 60 days. 60% of each month's sales are expected to be collected in the month following the sale and 8% of each month's sales are expected to be collected in the 2nd month following the sale. Credit terms are not expected to change in the next year from the present credit policy. The relationship between factory costs and the rate of output are indicated in the operating statement. Inventories of finished goods, however, are always valued at a "normal cost" of $2.10 per unit, that is, $2 per unit variable and $.10 per unit fixed. The $.10 per unit fixed is a figure based on the entire year's production and not one quarter. Expected Unit Sales and Production for the next 6 months: Sales Production April May June July August September 30,000 40,000 50,000 60,000 60,000 80,000 April May June July August September 50,000 50,000 60,000 80,000 80,000 90,000 Corporation Finance Easy Turn Toy Company Easy-Turn is a company that manufactures and sells a particular type of toy to manufacturers. It has been in business three months and finds itself with more orders taken than it has the funds to produce the goods on order. The company realizes that it must find a source of financing and convince this source that the company has a bright future and that a good source of short-term credit would be the missing ingredient to make this company a success. NIEBIE The company's sales for the first quarter have been 20,000 for January, 30,000 units for February, and 40,000 units for March. The selling price of the good is $3 per unit and is sold to its customers offering a discount if paid within the period from sale to the end of month or net 60 days. 60% of each month's sales are expected to be collected in the month following the sale and 8% of each month's sales are expected to be collected in the 2nd month following the sale. Credit terms are not expected to change in the next year from the present credit policy. The relationship between factory costs and the rate of output are indicated in the operating statement. Inventories of finished goods, however, are always valued at a "normal cost" of $2.10 per unit, that is, $2 per unit variable and $.10 per unit fixed. The $.10 per unit fixed is a figure based on the entire year's production and not one quarter. Expected Unit Sales and Production for the next 6 months: Sales Production April May June July August September 30,000 40,000 50,000 60,000 60,000 80,000 April May June July August September 50,000 50,000 60,000 80,000 80,000 90,000 =ycol Easy-Turn Toy Company Balance Sheet March 31, 1985 $3,580 $94,200 5,400 MR = 88,800 Cash in bank Accounts Receivable Allowance for Uncollectibles Inventories Safety Stock Finished Goods Prepaid Insurance Plant and Equipment Allowance for Depreciation 30,000 42,000 72,000 2,100 190,000 3,000 187,000 $353,480 Total Assets Liabilities Factory wages and salaries Sales Commission and expense Administration costs accured Accured property taxes Accounts payable (Power) Interest payable Income taxes payable Notes Payable (6%) 5 Year Capital Stock Retained Earnings $23,500 10,000 2,000 3,000 2,000 750 6,115 50,000 250,000 6,115 Total Liabilities and Equity $353,480 e Easy-Turn Toy Company Income Statement Quarter ended March 31, 1985 I. 2nd Quarter lended June 30 Revenue Sales) 140.000 Gross: billing (90,000 units at $3 each) Less: Provisions for uncollectible acc. Discount taken by customers 350.000 $270,000 $5,400 1,620 7,020 $262,980 $110,000 88,000 Revenue from operations Beginning Inversion @ 2.10 = Expenses Factory cost of goods (110,00 units produced) Materials appropriated to production Direct labor costs incurred Factory overhead Variable costs: Indirect labor (6% Power 14% Supplies, Misc. 16% Fixed costs: Supervision Property taxes Depreciation Insurance Miscellaneous 22,000 $11,000 4,400 6,600 6,000 3,000 3,000 300 2,700 15,000 Total factory costs incurred Less: Unsold inventory of finished goods 20,000 @ 2.10 Factory cost of goods sold $235,000 42,000 $ 193,000 45,000 12,000 $250,000 $ 12,980 Selling expenses (which vary proportionately with sales) Administration costs and expenses (fixed) Total expenses Net margin from operations Interest Earnings before taxes Income taxes Net Profits 750 # 12,230 6,115 6,115 Materials are purchased each month for production and they are paid in the month in which they are purchased. A safety stock of raw materials is kept on hand to furnish a 30,000 unit production if needed. Cost of supplies and miscellaneous variable and fixed factory costs are paid in the month in which those costs are incurred. Direct labor, indirect labor, and supervision costs make up the total factory payroll. These, as well as selling commissions and expense and all administration costs, are paid half in the month in which they are incurred, half in the following month. Power bills are paid in full in the month after they are incurred. Property taxes are paid quarterly and a disbursement of $3,000 will be made for these in April and July. The company has an arrangement by which it may borrow up to $20,000 for not longer than 60 days from the Roger County Bank; the bank charges interest at 6 percent per year on such loans, payable at the maturity of the loan. A cash balance of $40,000 4.000. must be maintained. No more cash is to be borrowed than is necessary to maintain this balance, but loans are made only in full thousands of dollars. Prepare: (a) An estimated income statement showing the effects of the expected transactions for the second quarter and third quarter. (b) Forecasts of collections from accounts receivable by months and of disbursements by months. (c) A summary cash statement, showing the amount of bank loans and the repayment of them; this statement should also show the expected cash balance at September 30. (d) An estimated balance sheet showing the expected financial position of the Illinois Novelty Company at September 30. (e) Upon completion, you will have three income statements and two balance sheets. Make a complete comparative financial analysis involving these four statements.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Attached.

Corporate Finance: Easy Turn Tony
The Estimated Income Stement
For the second Quarter and Third Quarter
Q2- Eded 30th June 1985
Q3-Ended 31st Sep 1985
Ravenues
$
$
$
$
$
Gross billing(units*$3)
360000
600000
Less: provission for uncntrolable A/C5400
5400
discout taken by customers
1620
1620
352980
592980
Revenue From operations
Beginning Investment @2.1
Expenses
Factory cost of goods 160000units
Material Appropriated to period 160000
250000
Direct Labour
88000
248000
88000 338000
Factory Overheads
Variable Cost
Indirect Lbour
16000
25000
Power
6400
10000
Supplies Misc
16000
32000
15000
50000
Fixed Cost
Suppervision
6000
6000
Property Taxes
3000
3000
Depreciation
3000
3000
Insuarance
300
300
Miscellaneous
2700
15000
2700
15000
Total factory cost
295000
403000
Less unsold inventory2.1@unit
84000
105000
211000
298000
Add Selling expences
61200
102000
Administration exprnces
4233.6
7056
Total Expenses
27643...


Anonymous
Really helpful material, saved me a great deal of time.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4
Similar Questions
Related Tags