BUSINESS COLLEGE

Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,600,000. Suppose management projects that its current​ year's quarterly sales will increase by 3​% in quarter​ 1, by another 7​% in quarter​ 2, by another 5​% in quarter​ 3, and by another 4​% in quarter 4. Management expects cost of goods sold to be 45​% of revenues every​ quarter, while operating expenses should be 30​% of revenues during each of the first two​ quarters, 25​% of revenues during the third​ quarter, and 20​% during the fourth quarter.Required:a. Prepare a budgeted income statement for each of the four quarters and for the entire year.b. Prepare the first portion of the budgeted income statement through gross profit, then complete the statement.

Answers

Answer 1
Answer:

Answer:

Budgeted Income Statement for each of the four quarters and for the entire year

Quarter                        1st                    2nd                3rd                  4th

Sales                     $4,738,000    $5,069,660    $5,323,143     $5,536,069

Cost of Sales       ($2,132,100)     ($2,281,347)  ($2,395,414)     ($2,491,231)

Gross Profit          $2,605,900     $2,788,313    $2,927,729     $3,044,838

Operating Costs  ($1,421,400)    ($1,520,898)  ($1,330,786)      ($1,107,214)

Operating Profit    $1,184,500      $1,267,415     $1,596,943      $1,937,624

Explanation:

Pay attention to the calculation of the following amounts :

  1. Sales - These are based on increments per quarter
  2. Cost of Sales - The Cost for quarter is at 45% of Revenue
  3. Operating Costs - Based on Sales amounts ( 30 % in the first two quarters , 25% in third and 20% in the 4th quarter.)

Related Questions

The independent cases are listed below includes all balance sheet accounts related to operating activities: Net income Depreciation expense Accounts receivable increae 100,000 (200,000) (20,000) Case ACase B Case C $310,000 15,000 $420,000 40,000 150,000 80,000 (decrease) Inventory increase (decrease) Accounts payable increase (50,000) (50,000) 120,00070,000 60,000 (220,000) (40,000) 35,000 50,000 decrease) Accrued liabilities increase (decrease) Show the operating activities section of cash flows for each of the given cases (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Case C Net Income Adjustments to Reconcile Net Income to net Cash provided by operating activities Depreciation Changes in Assets and Liabilities Accounts Receivable Inventory Accounts Payable Accrued Liabilities Net Cash Provided by OperatingActivities
Coronado Inc. had beginning inventory of $12700 at cost and $20900 at retail. Net purchases were $113930 at cost and $158500 at retail. Net markups were $9600, net markdowns were $7400, and sales revenue was $151100. Compute ending inventory at cost using the conventional retail method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.)
oo, Inc., has arranged a line of credit that allows it to borrow up to $55 million at any time. The interest rate is .631 percent per month. Additionally, the company must deposit 5 percent of the amount borrowed in a non-interest bearing account. The bank uses compound interest on its line-of-credit loans. If the company needs $31 million for 8 months, how much will it pay in interest
The government of Argentina has taken over all the country's banks. No compensation has been paid. Some U.S. citizens and businesses had accounts in the banks. Absent treaty provisions the takeover: a. can be partially set aside by a U.S. federal court on the accounts of U.S. citizens and businesses. b. can be reviewed by the U.S. State Department. c. can be set aside by a U.S. federal court because no compensation was paid. d. is immune from review under the act of state doctrine.
When creating a company's security policy, it is not necessary that the scope align with the company's annual information security budget. True False

The following information is needed to reconcile the cash balance for Discount Dry​ Cleaning, Inc. ​ A deposit of $ 5,600 is in transit. ​Outstanding checks total $ 1,500. ​The book balance is $ 6,100 on February​ 28, 2019. ​The bookkeeper recorded a $ 1,700 check as $ 17,300 in payment of the current​ month's rent. ​The bank balance on February​ 28, 2019, was $ 16,210. A deposit of $ 200 was credited by the bank for $ 2, 000. ​ A​ customer's check for $ 3,100 was returned for non-sufficient funds. ​The bank service charge is $ 90. What was the adjusted book​ balance?

Answers

Answer:

$18,510.

Explanation:

Book Balance                                               $6,100

Adjustments:

Add: Transposition Error                             15,600

Less: NSF                                                       3,100

Bank Service Charges                                       90

Adjusted Book Balance                            $18,510

Transposition Error - Company has understated its Cash Balance by recording 17,300 instead of 1,700. So, add the error to the Account.

NSF - Company has recorded a collection of receivable. But the bank termed the Check as "NSF" because of insufficient funds. So, deduct it from the Cash balance.

Deposit in-Transit and Outstanding Checks are already recorded in the Company's books of accounts. These transactions should be adjusted in the Bank Account.

Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile? A) They do not show how the firm's earnings are expected to change as the result of a particular decision.
B) They are not easily predicted from historical financial statements of a firm and its competitors.
C) These earnings are not actual cash flows.
D) They do not tell how the decision affects the firm's reported profits from an accounting perspective.

Answers

Answer and Explanation:

C) These earnings are not actual cash flows.  

Benton Company issues $10,000,000 of 10-year, 9% bonds on April 1, 2017 at 95 plus accrued interest. The bonds are dated January 1, 2017, and pay interest on June 30 and December 31. What is the total cash received on the issue date?

Answers

Answer:

$9,725,000  

Explanation:

The total cash received on the issue date is made of 95% of the bond's face value of $10,000,000 plus the three-month interest up to April 1 2017.

95% of face value=95%*$10,000,000=$9,500,000

three month interest accrued=$10,000,000*9%*3/12=$225,000

Total cash proceeds from bond issue=$9,500,000+$225,000

Total cash proceeds from bond issue=$9,725,000  

Jia is considering whether to go out to dinner at a restaurant with her friend. The meal is expected to cost $40, Jia typically leaves a 20% tip, and an Uber will cost $5 each way. Jia values the restaurant meal at $25. Jia enjoys her friend s company and is willing to pay $30 just to spend an evening with her. If Jia does not go out to the restaurant, she will eat at home, using groceries that cost her $8.a. Calculate Jia's cost associated with going out to dinner with her friend.
b. Calculate Jia's benefits associated with going out to dinner with her friend.

Answers

Answer:

a. Jia's cost associated with going out to dinner with her friend

= $58

b. Jia's benefit associated with going out to dinner with her friend

= $47

Explanation:

a) Data and Calculations:

Expected cost of meal =  $40

Tips (20%)                             8

Transport to & from =         10

Total cost of going out = $58

Benefits with going out:

Value of restaurant meal =     $25

Amount Jia is willing to pay = $30

Less of eating at home            ($8)

Total benefits with going out $47

Jia's cost associated with going out to dinner is $58 and her benefits are $55.

To calculate Jia's cost associated with going out to dinner with her friend, we need to add up the cost of the meal, the tip, and the Uber rides. The meal cost is $40, the tip is 20% of the meal cost (0.2 * 40 = $8), and the Uber rides cost $5 each way, so the total cost is $40 + $8 + $5 + $5 = $58.

To calculate Jia's benefits associated with going out to dinner with her friend, we need to consider the value of the restaurant meal and the enjoyment she gets from spending time with her friend. The value of the meal is $25, and Jia is willing to pay $30 just to spend time with her friend, so the total benefits are $25 + $30 = $55.

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On Mar 3, L. Lyons withdrew $100 for personal use. Use your knowledge of what a correct journal entry should look like to identify what would be included.

Answers

Answer:

L. Lyons Company

Correct Journal Entry

Debit L.Lyons, Drawings $100

Credit Cash $100

To record the cash withdrawn by L. Lyons for personal use.

Explanation:

When the owner, L. Lyons, withdraws cash for personal use, it reduces the owner's equity interest in the business.  Cash as an asset is also reduced by the same amount.  Therefore, the double entry should be a debit to the Owner's Capital account (here represented by Drawings) and a credit to the Cash account.

Final answer:

L. Lyons withdrawal of $100 would be treated as an owner's draw, reflecting a decrease in the company's assets. A journal entry would debit the owner's draw account and credit the cash/bank account.

Explanation:

When L. Lyons withdrew $100 for personal use, this would have been treated as an owner's draw and should be reflected in the financial records of the business. A correct journal entry would involve debiting the owner's draw account and crediting the cash or bank account. Why? The money is going out of the business (hence a decrease in the company's assets), and it's going towards the owner, so it's an owner's draw. So, the journal entry would look as follows:

  • Debit: Owner's Draw $100
  • Credit: Cash/Bank $100

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An internal control system is used to do which of the following:a. Protect Assets
b. Prevent all losses
c. Ensure reliable accounting
d. Control the entry operation

Answers

Answer:

C

Explanation:

An internal control system is used to ensure reliable accounting. Internal controls system can be defined as a given set of rules, policies, and procedures an organization puts in place to give direction, increase efficiency and strengthen how people follow to policies.
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