Exam 10: Projected Financial Statements

Use the information below to answer the following questions. Patiomaster Products manufactures patio furniture. The estimated numbers of sets to be sold in the last three months of 2015 and the first month of 2016 is: Finished goods inventory at the end of September is 2,000 units. Finished goods inventory is set at 20 per cent of next month's sales. -If a firm had credit sales of $1,250,000 for March and collected its sales as 20% in the month of sale and 80% in the month following the sale, how much of March sales would be collected in cash in March?

Use the information below to answer the following questions. Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000. -Refer to the information above. The ending balance in Trade payables for February is expected to be:

Projected financial statements can assist management with all of the following except:

Sales are $150,000 p.a., cost of sales is $100,000 p.a., fixed expenses are $18,000 p.a. and net profit is $32,000. If there is a 2% increase in the gross profit margin, what will be the new net profit?

The report that provides an estimate of the overall financial position of the firm at some future point in time is the:

Sales are $150,000 p.a., cost of sales is $100,000 p.a., fixed expenses are $18,000 p.a. and net profit is $32,000. If there is a 10% p.a. increase in sales volume predicted, what will be the new net profit?

Projected operating profit after tax, plus projected non-cash expenses, adjusted for changes over the period in projected inventory, debtors, creditors, prepayments, accruals and tax due, equals:

Use the information below to answer the following questions. The accountant from Trigg Traders examined the following report: Income statement (extract) for year ended 31 December 2016 The accountant of Trigg Traders estimated that the quantity of sales would double in 2017 and the unit cost would increase to $25. -Refer to the table above. If the unit cost for 2016 had increased to $30, how many units would have needed to be sold in 2016 to generate a gross profit of $150,000?

Use the information below to answer the following questions. Crystal Computers owns a chain of seven shops selling computer goods. In the past the company maintained a healthy cash balance. However, this has fallen in recent months, and at the end of September 2015 it had an overdraft of $100,000. In view of this, its managing director has asked you to prepare a cash forecast for the next six months. You have collected the following information: -Refer to the table above. The projected cash balance at the end of October is

In preparing a set of budgets using a spreadsheet, all of the following have formulas that are directly linked except:

Preparation of projected financial statements:

Use the information below to answer the following questions. Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000. -If a business wishes to test the effect of a 10% increase in selling price on its budget forecasts, it should use which form of analysis?

Use the information below to answer the following questions. Patiomaster Products manufactures patio furniture. The estimated numbers of sets to be sold in the last three months of 2015 and the first month of 2016 is: Finished goods inventory at the end of September is 2,000 units. Finished goods inventory is set at 20 per cent of next month's sales. -Refer to the table above. How many sets of patio furniture will be produced in December 2015?

Use the information below to answer the following questions. The accountant from Trigg Traders examined the following report: Income statement (extract) for year ended 31 December 2016 The accountant of Trigg Traders estimated that the quantity of sales would double in 2017 and the unit cost would increase to $25. -Refer to the table above. The projected gross profit for 2017 will be:

Use the information below to answer the following questions. Jackson Bottle Yard, a recycling glass company, has supplied the following information in relation to their actual sales in 2015 and planned sales for the first quarter of 2016. Past records indicate that expected receipts collected from debtors will be: 60 per cent in the month of sale 40 per cent in the month following the sale -In real-world studies on budgeting, it has been found that:

Use the information below to answer the following questions. Jackson Bottle Yard, a recycling glass company, has supplied the following information in relation to their actual sales in 2015 and planned sales for the first quarter of 2016. Past records indicate that expected receipts collected from debtors will be: 60 per cent in the month of sale 40 per cent in the month following the sale -Refer to the table above. What is the projected cash inflow from debtors in January?

Administrative expenses are expected to be $15,000 for each of the months of January, February and March 2015 and to increase by 10% in each of the next three months of the year. Administrative expenses are paid one month after they are incurred, and include a depreciation charge of $3,000 per month that is not expected to change over the 6 months. The figure for administrative expenses that will appear in the April cash budget is:

Use the information below to answer the following questions. Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000. -Before using a particular sales forecast, the forecast should be reviewed with respect to:

Use the information below to answer the following questions. Saddle Company, a leather manufacturer, has a sales budget of $500,000 for February. The cost of sales is estimated to be 35% of sales. All materials purchased by Saddle Company are paid for in the month following the purchase. The beginning inventory for February is $10,000, and an ending inventory of $11,000 is desired. The trade payables balance at the beginning of February is $88,000. -Which report provides a projection of income for a period of time into the future?

Use the information below to answer the following questions. Jackson Bottle Yard, a recycling glass company, has supplied the following information in relation to their actual sales in 2015 and planned sales for the first quarter of 2016. Past records indicate that expected receipts collected from debtors will be: 60 per cent in the month of sale 40 per cent in the month following the sale -Which statement in regard to sensitivity analysis is correct?