Question

Requirement #1 Given the following information for Jawa Corp. prepare a full cash budget for the...

Requirement #1

Given the following information for Jawa Corp. prepare a full cash budget for the months of April, May, and June.

                               Feb                        Mar                       Apr                        May                      June                      July       

Sales in Units     10,000                  12,000                  15,100                  16,250                  16,675                   16,000

All units are sold at a price of $24.75, with a per unit cost of $13.50. Sales are collected as follows: 60% month of sale, 30% month after sale and remainder 2nd month after sale. Purchases of materials, which account for 50% of the product cost (remainder of the product cost is Factory worker wages) are paid for 75% month of purchase and 25% month after purchase. Materials are purchased a month in advance.

In addition the following are paid monthly: Building Lease $21,750, Office salaries $10,500, Management Salaries $20,000, Trash removal $1,500, Utilities based on a rate of 20 cents per unit, Payroll taxes at the rate of 7.65% (paid on all wages), Equipment maintenance based on a rate of 35 cents per unit.

The company will also be making the following payments: May Insurance payment for the months of May-July $15,000, In April Income tax deposit of $30,000, the company will declare a quarterly dividend in May to be paid June 15th of $25,000, Employee first aid training at a cost of $2,500 is planned for July.

Depreciation is $21,265 per month based on straight line and Income taxes are based on an average effective tax rate of 11.50%.

At the start of April the company had a cash balance of $35,450.

Requirement #2

Based on the previous information prepare a traditional income statement (in proper format) for the month of June.

Requirement #3

The company likes to maintain a cash balance of $30,000 at all times. They are considering purchasing new machinery at the beginning of July at a cost of $175,000. Do they have a sufficient amount of cash on hand to make this purchase or would they need to make arrangements for any financing?

Requirement #4

Given that the company has the following dividend policy:

Dividends are paid quarterly based on the annual rate of $2.00 per share.

How many shares of stock are currently outstanding?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Use the following information to prepare the July cash budget for Acco Co. It should show...
Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash payments for the month and the cash balance expected on July 31. Beginning cash balance on July 1: $65,000. Cash receipts from sales: 25% is collected in the month of sale, 50% in the next month, and 25% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are May (actual), $1,880,000; June...
Based on the following data, prepare a cash budget (in proper form with labels) for July...
Based on the following data, prepare a cash budget (in proper form with labels) for July and August. Forecast sales May     $12,000       Cash sales are 30% of total sales.  Credit sales June     15,000         are collected as follows: 60% one month after the July      $16,000        sale and 40% 2 months after the sale August $12,000 Accounts payable are paid 100% 2 months after the purchase Expected A/P May     $4,500              In addition to purchases, there are utility June    $6,500              bills of $1,500 each month and rent of $1,200 July     $7,000              per month. August $8,000 Beginning...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget...
Cash Budget The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $128,000 $155,000 $216,000 Manufacturing costs 54,000 67,000 78,000 Selling and administrative expenses 37,000 42,000 48,000 Capital expenditures _ _ 52,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 60% are expected to be collected in the month following the...
The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the...
The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $97,000 $122,000 $155,000 Manufacturing costs 41,000 52,000 56,000 Selling and administrative expenses 28,000 33,000 34,000 Capital expenditures _ _ 37,000 The company expects to sell about 15% of its merchandise for cash. Of sales on account, 65% are expected to be collected in the month following the sale and...
Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the...
Exercise 20-25A Merchandising: Preparing a cash budget LO P4 Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash payments for the month and the cash balance expected on July 31. Beginning cash balance on July 1: $72,000. Cash receipts from sales: 30% is collected in the month of sale, 50% in the next month, and 20% in the second month after sale (uncollectible accounts are negligible and can...
The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the...
The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information: May June July Sales $90,000 $108,000 $148,000 Manufacturing costs 38,000 46,000 53,000 Selling and administrative expenses 26,000 29,000 33,000 Capital expenditures _ _ 36,000 The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and...
Cash Budget Problem: Mia Company Prepare Cash Budget for April, May, June 2018 Follow the following...
Cash Budget Problem: Mia Company Prepare Cash Budget for April, May, June 2018 Follow the following to prepare the budget: 1.         Real Sales 2018:         January                        - $100,000                                                 February                      - $200,000                                                 March                          - $150,000             Projected for 2018:     April                            - $400,000                                                 May                             - $300,000                                                 June                             - $200,000             Sales Payment History:           10% cash                                                             40% Accts. Rec. – collected n/30 days                                                             50% Accts. Rec. – collected n/60...
Cash Budget The owner of a building supply company has requested a cash budget for June....
Cash Budget The owner of a building supply company has requested a cash budget for June. After examining the records of the company, you find the following: Cash balance on June 1 is $1,186. Actual sales for April and May are as follows: April May Cash sales $10,000 $18,000 Credit sales 28,900 35,000 Total sales $38,900 $53,000 Credit sales are collected over a 3-month period: 40% in the month of sale, 30% in the second month, and 20% in the...
Following information relates to Acco Co. Beginning cash balance on July 1: $45,000. Cash receipts from...
Following information relates to Acco Co. Beginning cash balance on July 1: $45,000. Cash receipts from sales: 24% is collected in the month of sale, 50% in the next month, and 26% in the second month after sale (uncollectible accounts are negligible and can be ignored). Sales amounts are: May (actual), $1,548,000; June (actual), $1,080,000; and July (budgeted), $1,260,000. Payments on merchandise purchases: 48% in the month of purchase and 52% in the month following purchase. Purchases amounts are: June...
The Cash Budget Once we see how the components of the cash budget are calculated, it...
The Cash Budget Once we see how the components of the cash budget are calculated, it is just a matter of putting together an entire cash budget. It almost seems redundant to say, but a cash budget includes only cash items. So if a company makes sales on account, those are not included in the cash budget until cash is received on account. Similarly, a company may have non cash expenses. These are not included in the cash budget. A...