Practical Analysis 1. ABC Company’s has December unit sales of 12,000 units. Ass

Question

Practical Analysis

1. ABC Company’s has December unit sales of 12,000 units. Assuming a 5% growth, what is the projected unit sale?

2. ABC Company’s has December unit sales of 12,000 units. Assuming a 5% growth, and a selling price per unit of $40, what is the projected unit sales?

3. ABC Company projects the next period sales will be 12,000 units. ABC Company desires ending inventory equal to 20% of the next month’s sales. What is the desired inventory?

4. ABC Company projects the next period sales will be 12,000 units. ABC Company desires ending inventory equal to 20% of the next month’s sales. If the beginning inventory is 100, and the current month’s sales are 14,000, what is the number of units that will need to be purchased for the current month?

5. ABC Company has sales forecasts of the following: January = $40,000; February = $65,000; March = $52,850. All sales are on account and are collected as follows: 20% in the current month, 50% in the month following, 25% in the second month following, and 5% uncollectible. What are the cash receipts for March?

6. ABC Company has sales forecasts of the following: February = $40,000; March = $65,000. All sales are on account and are collected as follows: 20% in the current month, 50% in the month following, 25% in the second month following, and 5% uncollectible. If the total cash receipts for March equal $48,250, what is the sales forecast for January?

7. Assume the following information for the month of August. June sales = $40,000; July sales = $65,000; August sales = $52,850. All sales are on account and are collected as follows: 20% in the current month, 50% in the month following, 25% in the second month following, and 5% uncollectible. T he beginning cash balance is $14,670, with cash payment of $24,653. If the minimum cash balance is $50,000, what is the amount needed by the bank, or how much is available to pay towards the bank loan? Show the amount needed as a positive number and the amount to repay a loan as a negative number.

8. Assume the following information for t he month of August. June sales = $40,000; July sales = $65,000; August sales = $52.850. All sales are on account and are collected as follows: 20% in the current month, 50% in the month following, 25% in the second month following, and 5% uncollectable. The beginning cash balance is $14,670, with cash payments of $24,653. If the minimum cash balance is $40,000, what is the amount needed by the bank, or how much is available to pay towards the bank loan? Show the amount needed as a positive number and the amount to repay a loan as a negative number.

9. ABC Company pays for merchandise by paying cash and using credit. Credit purchases equal 80% of the purchases. Of those purchased on credit the purchase are paid for as follows: 60% in the current month, 35% in the month following, and 5% in the second month following. Assume January purchases are $65,000. How much of the January purchases are paid for in January?

10. ABC Company pays for merchandise entirely on credit as follows: 60% in the current month 35% in the month following, and 5% in the second month following. Assume January purchases are $65,000. How much of the January purchases are paid for in January?

Explanation / Answer

answer 1 1 Unit sales 12000 Growth 5% Growth in units 600 Projected sales 12600 answer 2 2 Projected units 12600 12600 2 per unit price 40 value of sale 504000 answer 3 3 next period sale 12000 3 inventory 20% ofnext period sale 2400 answer 4 4 Opening balance 100 add Purchases balancing figure 16300 total 16400 less closing 2400 equal to sales sales 14000 answer 5 5 jan feb mar sales 40000 65000 52580 Jan sales 20% 8000 50% 20000 25% 10000 Cash collection 8000 Feb sales 13000 32500 March sales 10516 collection of cash 8000 33000 53016 answer 6 Feb March sales Jan 40000 65000 Feb sales 20% 8000 Feb sales 50% 20000 25% March sales 13000 Jan sales 15250 total of march sales 48250 answer 10 January feb march 65% 35% 5% January Purchases 65000 42250 22750 3250 Payment to be made in January 42250 answer 9 Cash Purchase credit purchase jan 65000 13000 52000 Jan Feb Mar 60% 31200 35% 18200 5% 2600 total payment 13000 31200 total payment 44200 opening cash balance 14670 answer 8 June july august sales 40000 65000 52580 june sales 20 8000 50 20000 25 10000 July sales 20 13000 50 32500 25 August sales 20 10516 50 25 cash receipts 8000 33000 53016 opening balance of cash 14670 -41983 -48983 cash during the year 22670 -8983 4033 payment 24653 cash left -1983 Bank loan required -41983 -48983 -35967 cash require 40000 40000 40000 answer 7 June july august sales 40000 65000 52580 june sales 20 8000 50 20000 25 10000 July sales 20 13000 50 32500 25 August sales 20 10516 50 25 cash receipts 8000 33000 53016 opening balance of cash 14670 -51983 -68983 cash during the year 22670 -18983 -15967 payment 24653 cash left -1983 Bank loan required -51983 -68983 -65967 cash require 50000 50000 50000

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