Question

In: Accounting

Use the following information for Questions 1-7, which will appear on pages 2 and 3 of...

Use the following information for Questions 1-7, which will appear on pages 2 and 3 of this exam.

You will use the information to prepare elements of the ABC Company Budget for the 4th quarter (October, November, and December) of 2018.

The following balances were taken from the ABC Company’s balance sheet on September 30, 2018:

Cash                                      25,000

Accounts Receivable       90,000

Inventory                            30,000

Accounts Payable             54,000

The following information is also available and pertaining to ABC Company:

ABC sells one product that is priced at $10/unit. Sales for the months of October and November are expected to be 10,000 units, sales for December are expected to be 12,000 units, and sales for January are expected to be 9,000 units.

The company possessed 5,000 units of inventory as of September 30, 2018. They are required to have 50% of the following month’s projected sales available as an ending inventory. They purchase their inventory for $6/unit.

ABC pays their sales representatives a commission of 7.5% of sales. They pay their sales supervisors $3,000 per month. All salaries are paid in cash in the same month.

ABC’s cash-based general and administrative expenses are $4,000 per month, and are all paid in cash in the same month. ABC has a depreciation expense of $250/month.

All sales are on credit, and all accounts receivable are collected in full during the month following the sale.

All purchases of inventory are on credit, and all accounts payable are paid in full during the month following the purchase.

The minimum cash balance that ABC’s corporate policy requires is $10,000. If the monthly ending balance is below that amount, ABC must initiate a borrowing that requires a 1% monthly interest payment. As of September 30, there is no active borrowing. Excess cash balances above the minimum are to be used to repay active borrowings, if applicable.

Prepare the General and Administrative Expense Budget for the 4th quarter of 2018.

Solutions

Expert Solution

  • All working forms part of the answer
  • You have only asked for General & Admin Expenses Budget

General & Administrative Expense Budget : Quarter 4

Working

October

November

December

Total Quarter 4

A

Cash based expenses

$              4,000.00

$             4,000.00

$             4,000.00

$          12,000.00

B

Depreciation expenses

$                  250.00

$                 250.00

$                 250.00

$                750.00

C = A+B

Total Budgeted General & Admin expense for Quarter 4

$              4,250.00

$             4,250.00

$             4,250.00

$          12,750.00


Related Solutions

Use the following information to answer Questions 6 and 7. The 1-, 2-, 3-, and 4-year...
Use the following information to answer Questions 6 and 7. The 1-, 2-, 3-, and 4-year oil forward prices are $60, $58.35, $57.40, and $55 per barrel, respectively. Your firm is thinking about starting up an offshore drilling station and needs to forecast revenue over the next 4 years. Assume the risk-free rate is 5.25% each year and initial costs are $150,000,000. 6. (1 point) If your firm expects to extract 1,100,000 barrels of oil per year and each barrel...
QUESTION 7 Use the following information to answer the next two questions: (Question 1 of 2)...
QUESTION 7 Use the following information to answer the next two questions: (Question 1 of 2) Higgins Company purchased specialized equipment on July 1, 2019, that cost $300,000, has a residual value of $40,000, and a useful life of four years. The amount of depreciation expense for 2020, under the double declining balance method is: A. $112,500. B. None of the above C. $97,500. D. $75,000. E. $125,000. 2 points    QUESTION 7 B Use the following information to answer...
Use the following information for the questions 1 2 & 3 On 1 st January 2015...
Use the following information for the questions 1 2 & 3 On 1 st January 2015 Musheer LLC Company started a business of selling and buying Garments products at Muscat. The company has brought few assets while starting the business namely cash balance RO 32250, Bank balance RO 29750, short term investments RO 22150. The company was running successfully the garments products business and started earning good profits and the company gradually improved their business during the first six months...
Use the following information to answer questions 7-11 [The following information applies to the questions displayed...
Use the following information to answer questions 7-11 [The following information applies to the questions displayed below.] The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.    April 30 May 31   Inventories      Raw materials $ 33,000   $ 58,000      Work in process 9,600 18,200      Finished goods 59,000 33,400   Activities and information for May      Raw materials purchases (paid with cash) 174,000      Factory payroll (paid with cash) 330,000      Factory overhead         Indirect materials...
            Use the following information to answer questions 1 and 2.             This is the shareholders’...
            Use the following information to answer questions 1 and 2.             This is the shareholders’ equity of Pinnacle on Dec 31, 2016. Common share (200,000 issued and outstanding)                                    $   800,000 7 percent, preferred shares (20,000 authorized, 18,000 issued)                    200,000 Retained earnings                                                                                          650,000 Total                                                                                                          $ 1,650,000 Notes: Preferred shares were issued on Jan 1, 2013. No dividends declared or paid since 2013 until Pinnacle declared and paid $400,000 dividends on Dec 31, 2016. Assuming preferred shares...
Please use the following information for Questions 2, 3, and 4. To determine whether there was...
Please use the following information for Questions 2, 3, and 4. To determine whether there was a relationship between the region of the world that you live in and the amount of beer that you drink, suppose we took 3 samples of 25 people per region from Asia, Europe and America. 2) If we let µ1, µ2, and µ3 be the average calcium intake per day in milligrams for people with diagnosed osteopenia, osteoporosis or neither (healthy controls), respectively, the...
QUESTION: Use the information below to answer the following questions. YEAR 0 (now) 1 2 3...
QUESTION: Use the information below to answer the following questions. YEAR 0 (now) 1 2 3 4 5 6 PROJECT A - 25,950 5,009 -1,123 6,500 7,089 7,544 8,908 PROJECT B - 31,950 8,000 7,500 7,000 6,500 -2,123 5,500 (a) Compute the payback period for both projects. Using the payback method, which project will be accepted? (b) If the interest (discount) rate is 12.5 %, what is the net present value (NPV) for both projects? Which project will be accepted...
   Use the following information to answer questions 7.     On January 1, 2020, Beck Co....
   Use the following information to answer questions 7.     On January 1, 2020, Beck Co. issued (sold) ten-year bonds with a face amount of $3,000,000 and a stated      interest rate of 10%. Interest is payable semi-annually on January1 and July 1st of each year.      The bonds were priced to yield 8% (market interest rate).             Present value factors are as follows:                                                                                                                     At 4%                 At 8%          At 10% Present value of $1 for 10 periods 0.6756...
Use the following information to answer questions 1-7 Consider the following abbreviated financial statements for Boathead...
Use the following information to answer questions 1-7 Consider the following abbreviated financial statements for Boathead Enterprises: BOATHEAD ENTERPRISES 2014 and 2015 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2014 2015 2014 2015 Current assets $ 946 $ 1,008 Current liabilities $ 385 $ 404 Net fixed assets 3,907 4,600 Long-term debt 2,029 2,197 Equity 2,439 3,007 BOATHEAD ENTERPRISES 2015 Select Income Statement Info Sales $ 12,340 Costs 5,920 Depreciation 1,050 Interest paid 190 The tax rate is 35%....
Use the following information to answer questions 1-7 Consider the following abbreviated financial statements for Boathead...
Use the following information to answer questions 1-7 Consider the following abbreviated financial statements for Boathead Enterprises: BOATHEAD ENTERPRISES 2014 and 2015 Partial Balance Sheets Assets                                                       Liabilities and Owners’ Equity 2014      2015                                               2014      2015 Current assets $ 946 $ 1,008 Current liabilities $   385 $   404 Net fixed assets 3,907 4,600 Long-term debt 2,029 2,197 Equity 2,439 3,007 BOATHEAD ENTERPRISES 2015 Select Income Statement Info Sales $ 12,340 Costs 5,920 Depreciation 1,050 Interest paid 190 The tax rate is 35%....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT