“Diamond Company” is preparing a budget for the first quarter of year 2020. The following information is available:

• Total expected sales for last two months of 2019 and four months of 2020 are (in 000’s LE)

• All sales are on credit and collections from sales are 60% in the month of sales, 30% in the next month, and 10% in the following month.
• Cost of goods sold is 70% of sales.
• The desired ending inventory every month is 30% of the next month's cost of goods sold.

• It is expected that ending inventory of December, 2019, will be valued at LE 33 600.
• All purchases are paid in the month of purchases.
• All cash operating expenses are paid when incurred and the following are the budgeted expenses per month:

Wages LE 31 000, Advertising LE 5 000, Depreciation LE 16 000, Rent 12 000.

• It is planned to pay, for other cash operating expenses, the amount of LE 16 000 in January and LE 43 800 in February 2020.

Jesper Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Jesper Manufacturing's operations:

1. Actual sales in December were $76,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

2. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale.
3. Jesper Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units).
4. Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1.40/kg. Ending inventory of direct materials should be 20% of next month's production needs.
5. Monthly manufacturing conversion costs are $6,500 for factory rent, $2,900 for other fixed manufacturing expenses, and $1.40 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred.
6. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Jesper Manufacturing will purchase equipment for $5,800 (cash), while February's cash expenditure will be $11,600 and March's cash expenditure will be $15,800.
7. Operating expenses are budgeted to be $1.20 per unit sold plus fixed operating expenses of $1,400 per month. All operating expenses are paid in the month in which they are incurred.
8. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $5,600 for the entire quarter, which includes depreciation on new acquisitions.
9. Jesper Manufacturing has a policy that the ending cash balance in each month must be at least $4,400. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $130,000. The interest rate on these loans is 1% per month simple interest (not compounded). Jesper Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter.
10. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,800 cash at the end of February in estimated taxes.

Requirements:

1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total.
2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.)
3. Prepare a direct materials budget.

Decker Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to

Decker

​Manufacturing's operations:

LOADING...

​(Click the icon to view additional​ data.)Read the requirements

LOADING...

.

Requirement 1. Prepare a schedule of cash collections for​ January, February, and​ March, and for the quarter in total.

Enter any number in the edit fields and then click Check Answer.

Data Table

MORE INFORMATION

According to the Wall Street Journal, merger and acquisition activity in the first quarter rose to $5.3 billion. Approximately three-fourths of the 78 first-quarter deals occurred between information technology (IT) companies. The largest IT transaction of the quarter was EMC’s $625 million acquisition of VMWare. The VMWare acquisition broadened EMC’s core data storage device business to include software technology enabling multiple operating systems – such as Microsoft’s Windows, Linux, and OS X – to simultaneously and independently run on the same Intel-based server or workstation. Suppose that at the time of the acquisition a weak economy led many analysts to project that VMWare’s profits would grow at a constant rate of 2 percent for the foreseeable future, and that the company’s annual net income was $39.60 million.

If EMC’s estimated opportunity cost of funds is 9 percent, as an analyst, how would you view the acquisition?

a. Favorably - the price is less than the company is worth.

b. Indifferent - the price is equal to the company's worth.

c. Unfavorably - the price is more than the company is worth.

Would your conclusion change if you knew that EMC had credible information that the economy was on the verge of an expansion period that would boost VMWare’s projected annual growth rate to 4 percent for the foreseeable future?

a. No - the company is still worth more than the price.

b. Yes - the company is now worth less than the price.

c. Yes - the company is now worth more than the price.

d. No - the company is still worth less than the price.

According to the Wall Street Journal ,merger and acquisition activity in the first quarter rose to $5.3 billion. Approximately three-fourths of the 78 first- quarter deals occurred between information technology (IT) companies. The largest IT transaction of the quarter was EMC's $625 million acquisition of VMW are acquisition broadened EMC's core data storage device business to include software technology enabling multiple operating systems- such as Microsoft Windows, Linux and OS X - to simultaneously and independently run on the same Intel-based server or workstation. Suppose that at the time of the acquisition a weak economy led many analysts to project that VMWare's profits would grow at a constant rate of 2 percent for the foreseeable future, and that the comany's annual net income was $39.60 million. If EMC's estimated opportunity cost of funds is 9 percent, as an analyst, how would you view the acquisition?
would your conclusion change if you knew that EMC had credible information that the economy was on the verge of an expansion period that would boost VMWare's projected annual growth rate to 4 percent for the foreseeable future? Explain.

“Diamond Company” is preparing a budget for the first quarter of year 2020. The following information is available:

• Total expected sales for last two months of 2019 and four months of 2020 are (in 000’s LE)

  	November	December	January	February	March	April
  Sales	200	200	160	160	180	150

• All sales are on credit and collections from sales are 60% in the month of sales, 30% in the next month, and 10% in the following month.
• Cost of goods sold is 70% of sales.
• The desired ending inventory every month is 30% of the next month's cost of goods sold.
• It is expected that ending inventory of December, 2019, will be valued at LE 33 600.
• All purchases are paid in the month of purchases.
• All cash operating expenses are paid when incurred and the following are the budgeted expenses per month:

• Wages LE 31 000, Advertising LE 5 000, Depreciation LE 16 000, Rent 12 000.

• It is planned to pay, for other cash operating expenses, the amount of LE 16 000 in January and LE 43 800 in February 2020.required : prepare cash pudget

Jesper Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Jesper Manufacturing's operations:

1. Actual sales in December were $76,000. Selling price per unit is projected to remain stable at $9 per unit throughout the budget period. Sales for the first five months of the upcoming year are budgeted to be as follows:

2. Sales are 30% cash and 70% credit. All credit sales are collected in the month following the sale.
3. Jesper Manufacturing has a policy that states that each month's ending inventory of finished goods should be 10% of the following month's sales (in units).
4. Of each month's direct material purchases, 20% are paid for in the month of purchase, while the remainder is paid for in the month following purchase. Two kilograms of direct material is needed per unit at $1.40/kg. Ending inventory of direct materials should be 20% of next month's production needs.
5. Monthly manufacturing conversion costs are $6,500 for factory rent, $2,900 for other fixed manufacturing expenses, and $1.40 per unit for variable manufacturing overhead. No depreciation is included in these figures. All expenses are paid in the month in which they are incurred.
6. Computer equipment for the administrative offices will be purchased in the upcoming quarter. In January, Jesper Manufacturing will purchase equipment for $5,800 (cash), while February's cash expenditure will be $11,600 and March's cash expenditure will be $15,800.
7. Operating expenses are budgeted to be $1.20 per unit sold plus fixed operating expenses of $1,400 per month. All operating expenses are paid in the month in which they are incurred.
8. Depreciation on the building and equipment for the general and administrative offices is budgeted to be $5,600 for the entire quarter, which includes depreciation on new acquisitions.
1. Jesper Manufacturing has a policy that the ending cash balance in each month must be at least $4,400. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $130,000. The interest rate on these loans is 1% per month simple interest (not compounded). Jesper Manufacturing pays down on the line of credit balance if it has excess funds at the end of the quarter. The company also pays the accumulated interest at the end of the quarter on the funds borrowed during the quarter.
10. The company's income tax rate is projected to be 30% of operating income less interest expense. The company pays $10,800 cash at the end of February in estimated taxes.

Requirements:

1. Prepare a schedule of cash collections for January, February, and March, and for the quarter in total.
2. Prepare a production budget. (Hint: Unit sales = Sales in dollars / Selling price per unit.)
3. Prepare a direct materials budget.
4. Prepare a cash payments budget for the direct material purchases from Requirement 3.
5. Prepare a cash payments budget for conversion costs.
6. Prepare a cash payments budget for operating expenses.
7. Prepare a combined cash budget.
8. Calculate the budgeted manufacturing cost per unit. (Assume that fixed manufacturing overhead is budgeted to be $0.80 per unit for the year.)
9. Prepare a budgeted income statement for the quarter ending March 31. (Hint: Cost of goods sold = Budgeted cost of manufacturing each unit x Number of units sold.)
10. Prepare a partial budgeted balance sheet for March 31. Include Loans Payable and Income Tax Payable.
11. Aside from depreciation, can you name another expense that is not payable in cash? (Hint: that expense is not listed in this problem).

Derry Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to Derry Manufacturing's operations:

A company sells 1,200 units during the first quarter of the year at a selling price of $25 per unit.  In addition, the company has a beginning inventory of 600 units that were purchased at $10 per unit, and the following purchases and sales.

Date Units sold Units purchased Cost per unit

January 10         300    $11

January 25 450

February 7    400 $12

February 14 200

March 5 300 $14

March 27 550

If the company uses a periodic inventory system and the weighted average cost method of inventory valuation, then what is the company's ending inventory?

Jesper Manufacturing is preparing its master budget for the first quarter of the upcoming year. The following data pertain to JesperJesper ​Manufacturing's operations:

Data Table

Information

Requirements