\"We really need to get this new material-handling equipment in operation just a

Question

"We really need to get this new material-handling equipment in operation just after the new year begins. I hope we can finance it largely with cash and marketable securtties, but if necessary we can get a short-term loan down at MetroBank." This statement by Beth Davies-Lowry, president of Global Electronics Company, concluded a meeting she had called with the firm's top management. Global Is a small, rapidly growing wholesale r of consumer electronic products. The firm's main product lines are small kitchen appliances and power tools. Marcia Wilcox, Global Electron ics general manager of marketing, has recently completed a t. She belleves the company's sales during the first quarter of 20x1 will Increase by 10 percent each month over the previous month's sales. Then Wilcox expects sales to remain constant f months. Global's projected balance sheet as of December 31, 20xO Is as follows: or several Cash Accounts recelvable Marketable securities Inventory Buildings and equipment (net of accumulated depreclation) 1,252.000 Total assets $ 70,000 540,000 30,000 308,000 $2.200,000 Accounts payable Bond interest payable Property taxes payable Bonds payable (10%, due in 20x6) Common stock Retained earnings $ 352,800 25,000 7.200 600,000 1,000,000 215,000 Totel liabilittes and stockholders equity $2.200,000 Jack Hanson, the assistant controller, is now preparing a monthly budget for the first quarter of 20x1 in the process, the following information has been accumulated

Explanation / Answer

ans 1 January Februry March Quarter April Total sales T $880,000 $968,000 $1,064,800 $2,912,800 $1,171,280 Cash sales $220,000 $242,000 $266,200 $728,200 Credit sales C= (75%*T) $660,000 $726,000 $798,600 $2,184,600 Schedule of Expected Cash Collections Cash Sales (25% for cash) S $220,000 $242,000 $266,200 $728,200 Credit Sales same month D= (10%*T) $66,000 $72,600 $79,860 $218,460 Credit sales next month   540000 $594,000 $653,400 $1,787,400 Total Collections $826,000 $908,600 $999,460 $2,734,060 3) Purchases Budget January February March Quarter April Budgeted Cost of Goods Sold (70%*sales) $616,000 $677,600 $745,360 $2,038,960 $702,768 Add Desired Ending Inventory (50%*next COGS) $338,800 $372,680 $351,384 $351,384.0 Total Needs $954,800 $1,050,280 $1,096,744 $2,390,344 Less Beginning Inventory $308,000 $338,800 $372,680 $308,000 Required Purcahses P $646,800 $711,480 $724,064 $2,082,344 Schedule of Expected Cash Disbursements- Merchandise Purchases (40% in same month and 60% in next month) January February March Quarter Cash payments for purchases during the current month (40%*P) $258,720 $284,592 $289,626 $832,938 Cash payments for purchases during the preceding month $352,800 $388,080 $426,888 $1,167,768 Disbursements D $611,520 $672,672 $716,514 $2,000,706 Other Expenses: Sales Salaries 42000 42000 42000 126000 Advertising & Promotion 32000 32000 32000 96000 Admin Salaries 42000 42000 42000 126000 Interest on bonds (2500+5000) 30000 30000 Property taxes (1800*6) 10800 10800 Sales commissions $8,800 $9,680 $10,648 29128 Total Cash Payments for other expenses C 154800 136480 126648 417928 Total Cash Disbursements D+C $766,320 $809,152 $843,162 $2,418,634 Dear student I have done first four subparts

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