Chapter 4 Review 1) Craigco has forecasted the following possible scenarios for 2021. Average Selling Price...

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Chapter 4 Review 1) Craigco has forecasted the following possible scenarios for 2021. Average Selling Price $ 18.50 $ 17.00 $ 15.00 $ 16.00 Outcome Probability Units Sold A B C D 0.2 10,000 0.3 15,000 0.4 25,000 BUS 352: 0.1 40,000 a) Calculate Craigco's expected sales and gross profit for 2021 Average Cost of Goods Sold 12.00 $ 11.00 $ 11.50 $ 10.00 2) ABC Corporation expects to have sales of $750,000 in 2021.They expect net assets to be 60% of sales. The firm expects to have a 10% return on sales and starts the year with $75,000 in the bank. What will their closing bank balance be? Will they need any additional financing? 3) 123 Corporation expects sales to increase from 500,000 to 750,000 in 2021. Net assets will represent 50% of sales. The firm has a 6% return on sales and pays 35% of profits as dividends. What will the closing bank balance be? Will the firm need any additional financing? 4) Kootenay Bicycle Corporation sold 500 bikes at an average price of $1,250 in 2020. They expect sales to increase by 25% and prices to increase by 7.5% in 2021. Returned merchandise will represent 4% of sales. What is your net dollar sales projection for 2021? 5) Kootenay Brewing Corporation expects to sell 10,000 cases of beer in October 2020. They like to keep 12% of sales on hand at the end of every month. Beginning inventory is 2,500 cases. How many cases should they produce in October? 6) ABC Corporation is entering its off season for sales. In October 2020 they expect to sell 75,000 units. They Focus 6) ABC Corporation is entering its off season for sales. In October 2020 they expect to sell 75,000 units. They have an opening inventory of 30,000 units and desire to reduce ending inventory to 30% of opening inventory. How many units should they produce? 7) 123 Corporation had an inventory of 5,000 units which cost $8 per unit to produce. During October they produce 10,000 units at $8.75 per unit. If 123 corporation sold 7,500 units during October calculate cost of goods sold and ending inventory using LIFO inventory accounting, FIFO inventory accounting and average cost inventory accounting. 8) Craigco expects to have the $25,000 of credit sales in October, $45,000 in November and $65,000 in December. Experience has shown that 15% of sales are collected in the month of the sale, 60% are collected in the following month, 15% in the month after that and 10% are never collected. Prepare a cash receipts schedule for Craigco for October-December assuming they had sales of $35,000 in September and $20,000 in August. 9) Kootenay Bicycle Corporation forecasts sales in units to be 500 in May, 650 in June, 900 in July and 1,200 in August. Kootenay Bicycle Corporation tries to keep 50% of the next months expected sales in inventory, opening inventory Is 250. Materials costs are $750 per bike and paid in the month after production. Labour is $400 per bike and paid in the month of production. Interest of $5,000 will be paid in June and bonuses of $15,000 will be paid in July. Prepare a monthly production schedules and a monthly summary of cash payments for May-July. KBC produced 400 bikes in April. 10) Craigco has expected sales of $150,000 in September, $100,000 in October, $200,000 in November and $250,000 in December. 80% of sales are on credit. 25% of receivables are collected in the month of the sale, 50% in the month after the sale and 20% in the second month following the sale. The company's expected cash payments for November are $195,000 and $190,000 for December. They expect their beginning cash balance to be $40,000 which is their desired minimum balance. Prepare a cash budget and calculate any borrowing or repayments for November and December. Chapter 4 Review 1) Craigco has forecasted the following possible scenarios for 2021. Average Selling Price $ 18.50 $ 17.00 $ 15.00 $ 16.00 Outcome Probability Units Sold A B C D 0.2 10,000 0.3 15,000 0.4 25,000 BUS 352: 0.1 40,000 a) Calculate Craigco's expected sales and gross profit for 2021 Average Cost of Goods Sold 12.00 $ 11.00 $ 11.50 $ 10.00 2) ABC Corporation expects to have sales of $750,000 in 2021.They expect net assets to be 60% of sales. The firm expects to have a 10% return on sales and starts the year with $75,000 in the bank. What will their closing bank balance be? Will they need any additional financing? 3) 123 Corporation expects sales to increase from 500,000 to 750,000 in 2021. Net assets will represent 50% of sales. The firm has a 6% return on sales and pays 35% of profits as dividends. What will the closing bank balance be? Will the firm need any additional financing? 4) Kootenay Bicycle Corporation sold 500 bikes at an average price of $1,250 in 2020. They expect sales to increase by 25% and prices to increase by 7.5% in 2021. Returned merchandise will represent 4% of sales. What is your net dollar sales projection for 2021? 5) Kootenay Brewing Corporation expects to sell 10,000 cases of beer in October 2020. They like to keep 12% of sales on hand at the end of every month. Beginning inventory is 2,500 cases. How many cases should they produce in October? 6) ABC Corporation is entering its off season for sales. In October 2020 they expect to sell 75,000 units. They Focus 6) ABC Corporation is entering its off season for sales. In October 2020 they expect to sell 75,000 units. They have an opening inventory of 30,000 units and desire to reduce ending inventory to 30% of opening inventory. How many units should they produce? 7) 123 Corporation had an inventory of 5,000 units which cost $8 per unit to produce. During October they produce 10,000 units at $8.75 per unit. If 123 corporation sold 7,500 units during October calculate cost of goods sold and ending inventory using LIFO inventory accounting, FIFO inventory accounting and average cost inventory accounting. 8) Craigco expects to have the $25,000 of credit sales in October, $45,000 in November and $65,000 in December. Experience has shown that 15% of sales are collected in the month of the sale, 60% are collected in the following month, 15% in the month after that and 10% are never collected. Prepare a cash receipts schedule for Craigco for October-December assuming they had sales of $35,000 in September and $20,000 in August. 9) Kootenay Bicycle Corporation forecasts sales in units to be 500 in May, 650 in June, 900 in July and 1,200 in August. Kootenay Bicycle Corporation tries to keep 50% of the next months expected sales in inventory, opening inventory Is 250. Materials costs are $750 per bike and paid in the month after production. Labour is $400 per bike and paid in the month of production. Interest of $5,000 will be paid in June and bonuses of $15,000 will be paid in July. Prepare a monthly production schedules and a monthly summary of cash payments for May-July. KBC produced 400 bikes in April. 10) Craigco has expected sales of $150,000 in September, $100,000 in October, $200,000 in November and $250,000 in December. 80% of sales are on credit. 25% of receivables are collected in the month of the sale, 50% in the month after the sale and 20% in the second month following the sale. The company's expected cash payments for November are $195,000 and $190,000 for December. They expect their beginning cash balance to be $40,000 which is their desired minimum balance. Prepare a cash budget and calculate any borrowing or repayments for November and December.

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1 Expected sales 02 x 10000 03 x 15000 04 x 25000 01 x 40000 32500 Expected gross profit 02 x 10000 ... View the full answer