answer these accounting questions in the attached files

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Esay-turn is a company that manufactures and sells a particular type of toy to manufactureers. It has been in buskness three months and finds itself with good order. The cmpany realizes that it must find a source of financing and convince this sourse that sbort-term…

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F2 20 0 FI * esc л % ¢ # a 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 $ 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 EASY-TURN TOY COMPANY Balance Sheet March 31, 1985 $ 580 $ 94,200 5,400 88,800 Casb ia bank Accounts Receivable Allovance for Dacollectibles Inventories Safety Stock Finished Goods Prepaid Insurance Plaat and Equipment Allowance for Depreciation 30,000 42,000 72,000 2,100 190,000 3.000 187.000 $350,480 Total Assets Liabilities Factory wages and salaries Sales Commission and expense Administration costs accured Accured property taxes Accounts payable (Power) Income taxes payable Notes Payable(62) 5 Year Capital Stock . Retained Earnings Total Liabilities and Equity $ 23,500 10,000 2,000 3,000 2,000 4,990 50,000 250,000 4,990 $ 350,480 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. 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 50,000 60,000 70,000 April May VE June July August September 50,000 60,000 60,000 70,000 80,000 90,000 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. & + * ete - EASY-TURN TOY COMPANY tei Income Statement Quarter ended March 31, 1985 Revenue if $270,000 Gross billing (90,000 units at $3 each) Less: Provisions for uncollectible acc. Discount taken by customers $ 5,400 1.620 71020 Revenue from operations $262,980 $110,000 88,000 Expenses Factory cost of goods (110,000 units produced) Materials appropriated to production Direct labor costs incurred Factory overhead Variable costs: Indirect labor Power Suppliea, Misc. Fixed costs: Supervision Property taxes Depreciation Insurance Miscellaneous 22,000 $11,000 4,400 6600 6,000 3,000 3,000 300 2.700 15.000 $235,000 42.000 $ 193,000 Total factory costs incurred Less: Unsold inventory of finished goods Factory cost of goods sold 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 45,000 12.000 $250.000 $ 12 980 3,000 9,980 4,990 4,990
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Tags: Financial Statements Bank Management