Assume ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet but to also provide pro-forma financial statements for 2018. In addition, they have asked you to evaluate their company based on the pro-forma statements with regard to ratios. They also want you to evaluate 3 projects they are considering. Their information is as follows:
End of the year information:
Account |
12/31/17 Ending Balance |
Cash |
50,000 |
Accounts Receivable |
175,000 |
Inventory |
126,000 |
Equipment |
480,000 |
Accumulated Depreciation |
90,000 |
Accounts Payable |
156,000 |
Short-term Notes Payable |
12,000 |
Long-term Notes Payable |
200,000 |
Common Stock |
235,000 |
Retained Earnings |
solve |
Additional Information:
ABC Company’s management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below.
Project 1 |
Project 2 |
Project 3 |
|
Purchase Price |
$80,000 |
$175,000 |
$22,700 |
Required Rate of Return |
6% |
8% |
12% |
Time Period |
3 years |
5 years |
2 years |
Cash Flows – Year 1 |
$48,000 |
$85,000 |
$13,000 |
Cash Flows – Year 2 |
$36,000 |
$74,000 |
$13,000 |
Cash Flows – Year 3 |
$22,000 |
$38,000 |
N/A |
Cash Flows – Year 4 |
N/A |
$26,800 |
N/A |
Cash Flows – Year 5 |
N/A |
$19,000 |
N/A |
Required Action:
Part A:
Part B:
Assume ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet but...
RequiredOctober sales are estimated to be $140,000, of which 35 percent will be cash and 65 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. Prepare a sales budget.The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum...
The management of Zigby Manufacturing prepared the following
estimated balance sheet for March 2017:
ZIGBY MANUFACTURING
Estimated Balance Sheet
March 31, 2017
Assets
Cash
$
48,000
Accounts receivable
438,750
Raw materials inventory
87,900
Finished goods inventory
383,760
Total current assets
958,410
Equipment, gross
616,000
Accumulated depreciation
(158,000
)
Equipment, net
458,000
Total assets
$
1,416,410
Liabilities and Equity
Accounts payable
$
187,200
Short-term notes payable
20,000
Total current liabilities
207,200
Long-term note payable
508,000
Total liabilities
715,200
Common stock
343,000...
The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 99,000 Accounts receivable 500,250 Raw materials inventory 101,000 Finished goods inventory 402,500 Total current assets 1,102,750 Equipment, gross 618,000 Accumulated depreciation (159,000 ) Equipment, net 459,000 Total assets $ 1,561,750 Liabilities and Equity Accounts payable $ 209,700 Short-term notes payable 21,000 Total current liabilities 230,700 Long-term note payable 505,000 Total liabilities 735,700 Common stock 344,000...
he management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 99,000 Accounts receivable 500,250 Raw materials inventory 101,000 Finished goods inventory 402,500 Total current assets 1,102,750 Equipment, gross 618,000 Accumulated depreciation (159,000 ) Equipment, net 459,000 Total assets $ 1,561,750 Liabilities and Equity Accounts payable $ 209,700 Short-term notes payable 21,000 Total current liabilities 230,700 Long-term note payable 505,000 Total liabilities 735,700 Common stock 344,000...
The management of Zigby Manufacturing prepared the following
estimated balance sheet for March 2017:
ZIGBY MANUFACTURING
Estimated Balance Sheet
March 31, 2017
Assets
Cash
$
50,000
Accounts receivable
434,240
Raw materials inventory
84,210
Finished goods inventory
368,000
Total current assets
936,450
Equipment, gross
602,000
Accumulated depreciation
(151,000
)
Equipment, net
451,000
Total assets
$
1,387,450
Liabilities and Equity
Accounts payable
$
196,610
Short-term notes payable
12,000
Total current liabilities
208,610
Long-term note payable
505,000
Total liabilities
713,610
Common stock
336,000...
The management of Zigby Manufacturing prepared the following
estimated balance sheet for March 2017:
ZIGBY MANUFACTURING
Estimated Balance Sheet
March 31, 2017
Assets
Cash
$
53,000
Accounts receivable
392,400
Raw materials inventory
96,600
Finished goods inventory
313,920
Total current assets
855,920
Equipment, gross
626,000
Accumulated depreciation
(163,000
)
Equipment, net
463,000
Total assets
$
1,318,920
Liabilities and Equity
Accounts payable
$
204,800
Short-term notes payable
25,000
Total current liabilities
229,800
Long-term note payable
520,000
Total liabilities
749,800
Common stock
348,000...
The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: To prepare a master budget for April May, and June of 2017. management gathers the following information: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash $ 53,000 Accounts receivable 392,400 Raw materials inventory 96,600 Finished goods 313,920 inventory Total current assets 855,920 Equipment, qross 626,000 Accumulated (163,000) depreciation Equipment, net 463,000 Total assets $1,318,920 Liabilities and Equity Accounts payable $ 204,800 Short-term notes payable...
The management of Zigby Manufacturing prepared the following
estimated balance sheet for March 2019.
To prepare a master budget for April, May, and June of 2019,
management gathers the following information.
Sales for March total 20,000 units. Forecasted sales in units
are as follows: April, 20,000; May, 19,000; June, 19,500; and July,
20,000. Sales of 245,000 units are forecasted for the entire year.
The product’s selling price is $26.00 per unit and its total
product cost is $22.80 per unit....
The management of Zigby Manufacturing prepared the following
estimated balance sheet for March 2019.
To prepare a master budget for April, May, and June of 2019,
management gathers the following information.
Sales for March total 20,000 units. Forecasted sales in units
are as follows: April, 20,000; May, 19,000; June, 19,500; and July,
20,000. Sales of 245,000 units are forecasted for the entire year.
The product’s selling price is $26.00 per unit and its total
product cost is $22.80 per unit....