Nova Wood Manufacturing company sales in December 2018 were $60,000 and they are expected to rise...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Nova Wood Manufacturing company sales in December 2018 were $60,000 and they are expected to rise by $4,000 per month for the next 5 months. Of sales, 80 per cent are collected during the month of sale and the rest two months after sales. The cost of sales is 60 per cent of sales and, the company plans to keep an inventory at the end of each month equal to forty per cent of the anticipated sales for the next month's sales. Suppliers are paid one month after purchases are made. Monthly wages amount to $3,000, rent and heating $800 and depreciation $600. A machine is to be bought in February for $4,000 paid in cash. The purchase of the machine means that the monthly change for depreciation will increase by $40. The inventory held at January 1st is $12,450. Required: 1. Calculate the estimated cash collection from sales for February and March.(8) marks) 2. Calculate the purchases for February and March. (12 marks) 3. Assuming that the cash balance at 31/01/2019 is $8,000; prepare a cash budget for the two months ending March 31, 2019.( 18 marks) 4. Discuss whether the company will be able to repay a loan of $45,000 at the end of March.(2 marks) Nova Wood Manufacturing company sales in December 2018 were $60,000 and they are expected to rise by $4,000 per month for the next 5 months. Of sales, 80 per cent are collected during the month of sale and the rest two months after sales. The cost of sales is 60 per cent of sales and, the company plans to keep an inventory at the end of each month equal to forty per cent of the anticipated sales for the next month's sales. Suppliers are paid one month after purchases are made. Monthly wages amount to $3,000, rent and heating $800 and depreciation $600. A machine is to be bought in February for $4,000 paid in cash. The purchase of the machine means that the monthly change for depreciation will increase by $40. The inventory held at January 1st is $12,450. Required: 1. Calculate the estimated cash collection from sales for February and March.(8) marks) 2. Calculate the purchases for February and March. (12 marks) 3. Assuming that the cash balance at 31/01/2019 is $8,000; prepare a cash budget for the two months ending March 31, 2019.( 18 marks) 4. Discuss whether the company will be able to repay a loan of $45,000 at the end of March.(2 marks)
Expert Answer:
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
You want to receive $5,000 per month for the next 5 years a). How much would you need to deposit today if you can earn 0.75% per month? b). What monthly rate would you need to earn if you only have...
-
You want to receive $5,000 per month for the next 5 years. How much would you need to deposit today if you can earn 0.75% per month?
-
Derek can deposit $266.00 per month for the next 10 years into an account at Bank A. The first deposit will be made next month. Bank A pays 12.00% and compounds interest monthly. Derek can deposit...
-
Evaluate the limit or determine that it does not exist. |xx| lim (x,y)(0,0) [x] + [yl
-
For the weldments of Prob. 94, the electrodes are specified in the table. For the electrode metal indicated, what is the allowable load on the weldment? Prob. 94, The figure shows a horizontal steel...
-
The file named Yeartodate.xlsx contains a companys monthly sales from January 2008 through August 2013. Write a formula that returns for a given year and month of a year the years cumulative sales to...
-
During 2023, it was common on some social media sites and internet discussion boards to hear people say, No one is willing to work anymore. Go to the Hubbard and OBrien Economics Blog and read the...
-
Paul Bunyan is the owner of noncumulative 8 percent preferred stock in the Broadview Corporation, which had no earnings or profits in 2009. In 2010, the corporation had large profits and a surplus...
-
7. A vertical spring is fixed to one of its end and a massless plank fitted to the other end. A block is released from a height has shown. Spring is in relaxed position. Then choose the correct...
-
Pet Emporium had a robbery on the weekend in which a large amount of inventory was taken. The loss is covered completely by insurance. A physical inventory count determined that the cost of the...
-
The adjusted trial balance of William Co. for the year ending December 31, 2025, contains the following. William Co. Adjusted Trial Balance December 31, 2025 Cash Accounts Receivable Prepaid Rent...
-
The variables \(m, n, r, t, A\), and \(P\) are used in the various financial formulas. Tell what each of these variables represents.
-
Find the sum of the first 5 positive integers.
-
If possible, find the sum of the infinite geometric series in Problems 19-24. \(-20+10-5+\cdots\)
-
Evaluate the expressions in Problems 11-18. \(\sum_{k=0}^{4} 3(-2)^{k}\)
-
You want to retire at age 65 . You decide to make a deposit to yourself at the end of each year into an account paying 3\%, compounded annually. Assuming you are now 25 and can spare \(\$ 1,200\) per...
-
You have just started working and you've been assigned to lead a team that makes recommendations to the CFO on capital expenditures for the coming year. Your capital expenditure budget is $100...
-
You purchase a bond with a coupon rate of 6.7 percent, a par value $1,000, and a clean price of $905. Assume a par value of $1,000. If the next semiannual coupon payment is due in two months, what is...
-
The assumptions of CVP analysis are so simplistic that no firm would make a decision based on CVP alone. Therefore, there is no reason to learn CVP analysis. Comment.
-
Reds Lumber hired a consultant to update its system for reporting the cost of customers. The consultant showed Red an analysis that indicates that customer support costs are significantly higher for...
-
Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 440 hours for Massive Airframes and...
-
What is likely to be the impact of rising levels of intra-regional trade for the world economy?
-
Why doesnt the USA specialise as much as General Motors or Texaco? Why doesnt the UK specialise as much as Unilever? Is the answer to these questions similar to the answer to the questions, Why...
-
It is often argued that if the market fails to develop infant industries, then this is an argument for government intervention, but not necessarily in the form of restricting imports. In what other...
Study smarter with the SolutionInn App