Why would bankers need to see the business plan?

Assume a company is preparing a budget for its first two months of operations. During the first and second months it expects cre

Orlov [11]

Answer:

$28,800

Explanation:

Follow the given collection policy :

Cash Collection = 60 % in month of the sale + 40 % in the following month

<em>therefore,</em>

During the first month :

Cash Collection = 60 % in month of the sale only

= $48,000 x 60 %

= $28,800

The expected cash collections from credit sales during the first month is $28,800

3 0

3 years ago

A foreign company has offered to buy 75 units for a reduced sales price of $320 per unit. The marketing manager says the sale wi

belka [17]

Answer:

an increase in the operating income by $16,322

Explanation:

The computation of the impact in the operating income is given below:

Variable cost of 75 units (1300000 × 75 ÷ 12700) 7,678

Sale price of 75 units (75 × 320) 24,000

Increase in operating income (24000 - 7678) $16,322

hence, the impact in the operating income is that there is an increase in the operating income by $16,322

4 0

3 years ago

Each unit requires 2 pounds of direct materials, which cost $6 per pound. The company’s policy is to maintain direct materials i

ycow [4]

Answer: Budgeted Raw Material to be consumed in July.

Quantity Price per pound Total

10,200 $6 $61,200

Explanation:

As for the information provided, the material at month end in hand shall be:

20% of upcoming month's sale.

If in June at month end, the inventory in hand = 2,040 pounds of raw material.

Then, this represents 20% of total requirement of July.

Therefore, total requirement in July = $\frac{2,040}{0.20} = 10,200\ pounds$

This basically means:

Total inventory required =

Quantity Price per pound Total

10,200 $6 $61,200

5 0

3 years ago

Tutak Industries issued a $1,000 face value bond a number of years ago that will mature in eight years. Similar bonds are yieldi

s2008m [1.1K]

Answer: The coupon rate is 13%

Explanation:

We would first calculate the Coupon Payment and then later using the coupon payment we would compute the Coupon rate.

PV = $\frac{FV}{(1+r)^{N} }$ + A [ $[\frac{1-\frac{1}{(1+r)^{N} } }{r} ]$ ]

Where,

FV = $1,000

PV = $1,291.31

r = 8%

N = 8 Years

A = Coupon Payment

1291.31 = $\frac{1000}{(1+0.08)^{8} }$ + A $[\frac{1-\frac{1}{(1+0.08)^{8} } }{0.08} ]$

Solve for A

A = 130.69

The coupon payment is $130

Coupon rate = (Coupon payment / Face value) x 100

= $\frac{130}{1000}$ x 100

= 13 %

7 0

3 years ago

Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transa

sweet-ann [11.9K]

Answer:

Explanation:

Net income is the summation of all revenue generated substracted from all costs such as tax, interest and others it is the profit made.

Cash flow is the amount that the producer needed to spend when stating an accounting section romove from amount needed at the end of that accounting section.

Whenever transactions are carried out,

Cash flow and net income can be affected in ways that are not the same, once goods is sold the net income is noted by the manufacturer, let say he sell goods of $400 to a retailer if the retailer doesn't pay instantly, it mean the manufacturer has $400 cash less.i.e net income

a. Purchased $125 of supplies for cash.

Answer:

✓There is decrease in cash by $125

✓There is no change as far as Net Income is concerned here.

b. Recorded an adjusting entry to record use of $45 of the above supplies.

Answer:

✓There is No change to Cash here,

✓The net income is is decreased by $45.

c. Made sales of $1,220, all on account.

Answer:

✓There is No change to Cash here,

✓The Net Income is increased by $1,220

d. Received $850 from customers in payment of their accounts.

Answer:

✓ There is Cash increase, by. $850 ,

✓ There is No change to Net Income

e. Purchased equipment for cash, $2,500.

Answer:

✓There is Cash is decreased by $2,500

✓ There is no change to Net Income

f. Recorded depreciation of building for period used, $610.

Answer:

✓ There is No change to cash,

✓ there is decrease in Net income by

$610

6 0

3 years ago