Essay - Problems 20x0 20x1 December January February March 1st Quarter A)...

PROBLEMS

***** 20x1 December January February March 1st quarter a) Sales budget Total sales 400,000 440,000 484,000 532,400 1,456,400 Cash ***** 100,000 110,000 121,000 133,100 364,100 Sales on account 300,000 330,000 363,000 399,300 1,092,300 20x0 20x1 b) ***** receipts ***** December January ***** March 1st quarter Cash sales 110,000 121,000 133,100 364,100 Cash collecti*****s from credit ***** made during current month 33,000 36,300 39,930 109,230 Cash collections from credit sales made during previous month 270,000 297,000 326,700 893,700 Total cash receipts 413,000 454,300 499,730 1,367,030

***** ***** c) Purchases budget December ***** February March 1st ***** Budgeted cost of goods sold 280,000 308,000 338,800 372,680 1,019,480 Add: Desired ending inventory 154,000 169,400 186,340 186,340 1,995,560 Total ***** needed 434,000 477,400 525,140 559,020 3,015,040 Less: expected beginning inventory (140,000) (154,000) (169,400) (186,340) (509,740) Purchases 294,000 323,400 355,740 372,680 2,505,300 20x0 20x1 d) ***** disbursement budget December January February March 1st quarter Inventory purchases Cash payments ***** ***** during the current ***** 129,360 142,296 149,072 420,728 Cash ***** from purchases during ***** preceding month 176,400 194,040 213,444 583,884 Total cash payments for inventory ***** 305,760 336,336 362,516 1,004,612 Other expenses Sales salaries 21,000 21,000 21,000 63,000 Advertising and production 16,000 16,000 16,000 48,000 Administrative ***** 21,000 21,000 21,000 63,000 Interest on bonds 15,000 0 0 15,000 Property taxes 0 5,400 0 5,400 Sales commissions 4,400 4,840 5,324 14,564 Total ***** payments for other purchases 77,400 68,240 63,324 208,964 Total cash disbursements 383,160 404,576 425,840 1,213,576

20x0 ***** e) Summary cash ***** D*****cember January February March 1st quarter Cash receipts 413,000 454,300 499,730 1,367,030 *****: ***** disbursements (383,160) (404,576) (425,840) (1,213,576) Changes in cash balance dur*****g period due to operations 29,840 49,724 73,890 153,454 Sale of marketable securities (1/2/x1) 15,000 0 0 15,000 Proceeds from bank loan (1/2/x1) 100,000 0 0 1*****0,000 Purchase of equipment (125,000) 0 0 (125,*****00) Repayment of bank loan (3/31/x1) 0 (100,000) (100,000) Interest in bank loan 0 (2,500) (2,500) Payment of dividends 0 (50,000) (50,000)

***** ***** cash ***** during 1st quarter

Cash balance 1/1/x1 29,000 Cash ***** 3/31/x1 38,954 f) Analysis of short-term financial needs Projected cash balance of December 31, 20x0 29,000 Less: Minimum cash balance 19,000 Cash available for ***** ***** 10,000 Projected proceeds from sale ***** marketable securities 15,000 ***** available 25,000 Less: Cost of investment in equipment (125,000) Required short term-borrowing 100,000 g,h) Income statement Revenues Sales revenue 1,456,400 Proceeds from marketable securities 15,000 Bank ***** 100,000 Total 1,571,400 *****s and expenses Total cash disbursements 1,213,576 Purchase of ***** 125,000 Repayment of bank loan (3/31/x1) 100,000 Interest in ***** loan 2,500 Depreciation 75,000 ***** 1,516,076 Profit 55,324 ***** of dividends 50,000 Retained earnings 5,324 I) Balance sheet Cash 38,954 Accounts receivable 326,700 Marketable securities 0 *****nventory 186,340 Buildings and equipment 676,000 Total assets 1,227,994 Accounts payable 223,608 Bond interest payable 5,000 Property ***** payable 900 Bonds payable 300,000 Common stock 500,000 Retained ***** (cummulated) 198,486 Total liabilities and stockholders' equity 1,227,994

In order to analyze Atlantico's budgeting policy, a brief look on the