Wednesday, October 17, 2012

Let's earn some extra cash for Christmas :)

This post is a bit off from my usual academic related posts so I apologize in advance if you feel this is post is too out of place.

My friend seems to be earning so well with this new racket of hers that I decided to give it a try.  I'm not sure how this will work out for me (crossing fingers it will) and for you.  But for now, since this doesn't seem to take much effort from me except to sign up, post my unique referral link to my blogs, facebook, twitter and all other online social media, I will give this a try.

So please, click my link, sign up as my referral and let's earn extra cash in time for Christmas :)

Wednesday, May 30, 2012

Managerial Accounting P20-5A Near the end of 2011, the management of Simid Sports Co

Managerial Accounting

P20-5A Preparation of a complete master budget     
Near the end of 2011, the management of Simid Sports Co, a merchandising company, prepared the following estimated balance sheet for December 31, 2011
Simid Sports Company
Estimated Balance Sheet
December 31,2011
Assets
Cash                           18,000
Accounts Receivable                       262,500
Inventory                               75,000
Total Current Assets                        355,500
Equipment                 270,000
Less accumulated depreciation       33,750           236,250
Total Assets                $       591,750
Liabilities and Equity
Accounts Payable                 180,000
Bank loan payable                    7,500
Taxes payable (due 3/15/2012)                45,000
Total liabilities                      232,500
Common Stock                     236,250
Retained Earnings                 123,000
Total stockholders equity                             359,250
Total liabilities and equity                   $       591,750
To prepare a master budget for January, February and March 2012, management gathers the following information
a. Simid Sports single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 2,500 units on December 1,2011, is more than management's desired level for 2012, which is 20% of the next months expected sales (in units). Expected sales are: January, 3,500 units, February, 4,500 units, March, 5,500 units, and April, 5,000 units.
b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month, after the month of sale. For the December 31, 2011, accounts receivable balance, $62,500 is collected in January and the remaining $200,000 is collected in February.
c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purhase. For the December 31, 201, accounts payable balance, $40,000 is paid in January and the remaining $140,000 is paid in February.
d. Sales commissions equal to 20% of sales ar paid each month. Sales salaries (excluding commissions) are $30,000 per year.
e. General and administrative salaries are $72,000 per year. Maintenance expense equals $1,000 per month and is paid in cash.
f. Equipment reported in the December 31, 2011, balance sheet was purchased January 2011. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter:
January, $18,000, February, $48,000, and March, $14,400. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month's deprecation is taken for the month is which the equipment is purchased.
g. The company plans to acquire land at the end of March at a cost of $75,000, which will be paid with cash on the last day of the month.
h. Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at the end of each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $12,500 each month.
i. The income tax rate for the company is 40%. Income taxes on the first quarter's income will not be paid until Apri l15.

Required:
Prepare a master budget for each of the first three months of 2012; include the following component budgets (show supporting calcuations as needed, and round amounts to the nearest dollar).
1. Monthly sales budgets (showing both budgeted unit sales and dollar sales)
2. Monthly merchandise purchases budget.
3. Monthly selling expense budget.
4. Monthly general and administrative expense budgets.
5. Monthly capital expenditures budgets.
6. Monthly cash budgets.
7. Budgeted income statement for the entire first quarter (not for each month)
8. Budget balance sheet as of March 31, 2012.