Accounting

Project1AnswerPracticeCorporation.xls

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COMPANY:			Practice Corporation
QUARTER:			For the Quarter ended March 31, 2019
			March 31, 2019
GENERAL LEDGER BALANCES AS OF:			December 31, 2018
Current Assets:
	Cash		$12,000
	Accounts Receivable		80,000
	Inventory		50,000
	Total Current Assets			$142,000
	Plant and Equipment (net)			145,000
Total Assets				$287,000
Current Liabilities:
	Accounts Payable			$45,000
	Short-term Borrowing			0
Stockholders' Equity:
	Capital Stock		$185,000
	Retained Earnings		57,000
	Total Stockholder's Equity			242,000
Total liabilities and stockholders' equity				$287,000
ACTUAL SALES/BUDGETED SALES:
	December			$150,000
	January			170,000
	February			180,000
	March			140,000
	April			120,000
Sales Breakdown
	Cash			25%
	Credit			75%
Gross Profit Rate as a % of sales				40%
	COGS			60%
Monthly Expenses
	A expense			$15,000
	B expenses			12,000
	C expenses			18,000
	D expenses			6,000
	E expense			1%
	F expenses			2%
Percentage of following month sales needs to be held in inventory stated at cost				35%
Inventory purchase payment breakdown
	Month of purchase			50%
	Next month			50%
Capital Purchases in Cash
	January	New Computer		$15,000
	February	Copier		10,000
	March	Other Equipment		18,000
Cash Dividends
	January			$5,000
	February			15,000
	March			10,000
Minimum Cash Balance				$6,000
Borrowings and Repayment of Principal in Multiples of				1,000
Interest Rate				12%
Monthly Rate				0.01

Practice Corporation
Selling and Administrative Budget Expenses
For the Quarter ended March 31, 2019
	Months
	January	February	March	April	Total
Budgeted sales	$170,000	$180,000	$140,000		$490,000
Variable S & A:
F expenses	$3,400	$3,600	$2,800		$9,800
E expense	1,700	1,800	1,400		4,900
Total variable S& A	$5,100	$5,400	$4,200		$14,700
Fixed S & A:
A expense	$15,000	$15,000	$15,000		$45,000
C expenses	18,000	18,000	18,000		54,000
B expenses	12,000	12,000	12,000		36,000
D expenses	6,000	6,000	6,000		18,000
Total fixed S & A	$51,000	$51,000	$51,000		$153,000
Total Marketing Expenses	$56,100	$56,400	$55,200		$167,700

Practice Corporation
Cash Receipts from Customers Schedule
For the Quarter ended March 31, 2019
	Months
	January	February	March	Total
Cash sales	$42,500	$45,000	$35,000	$122,500
Received on acct from sales in:
December	80,000			80,000
January		127,500		127,500
February			135,000	135,000
	$122,500	$172,500	$170,000	$465,000

Practice Corporation
Cash Disbursement on Inventory Purchases Schedule
For the Quarter ended March 31, 2019
	Months
	January	February	March	Total
Cash paid from prior month inventory purchases	$45,000	$44,900	$49,800	$139,700
Cash paid for current month inventory purchases	44,900	49,800	39,900	134,600
Total cash paid out for invenory purchases	$89,900	$94,700	$89,700	$274,300

Practice Corporation
Cash Budget
For the Quarter ended March 31, 2019
	Months
	January	February	March	Total
Beginning cash balance	$12,000	$6,180	$6,260	$12,000
Collections:
Cash collected from customers	122,500	172,500	170,000	465,000
Total cash available	$134,500	$178,680	$176,260	$477,000
Less Disbursements:
Cash paid out for inventory purchases	89,900	94,700	89,700	274,300
Cash paid for S & A expenses	50,100	50,400	49,200	149,700
Cash paid for equipment purchases	15,000	10,000	18,000	43,000
Cash paid for dividends	5,000	15,000	10,000	30,000
Total disbursements	$160,000	$170,100	$166,900	$497,000
Minimum cash balance	6,000	6,000	6,000	6,000
Total Cash Needs	$166,000	$176,100	$172,900	$503,000
Excess (deficiency) of cash available over needs	($31,500)	$2,580	$3,360	($26,000)
Financing:
Borrowing	$32,000	$0	$0	$32,000
Amount to Borrow to pay interest on loan	0	0	0	0
Total Borrowings	$32,000	$0	$0	$32,000
Repayments (outflows)
Amount left for repayment of principal	$0	$2,260	$3,060
Amount over a $1000	0	2,260	3,060
Round down to the nearest thousand	0	2,000	3,000
Repayment of principal (outflows)	0	(2,000)	(3,000)	(5,000)
Interests (outflows)	(320)	(320)	(300)	(940)
Net Financing (interest and principal)	$31,680	($2,320)	($3,300)	$26,060
Plus: Minimum cash balance	6,000	6,000	6,000	6,000
Ending Cash Balance	$6,180	$6,260	$6,060	$6,060
Short-Term Borrowing Balance	$32,000	$30,000	$27,000	$27,000

Practice Corporation
Budgeted Income Statement
For the Quarter ended March 31, 2019
Sales	$490,000
Less: COGS	294,000
Gross margin	$196,000
Less: selling and administrative expenses	167,700
Operating income	$28,300
Less: interest expense	940
Income before taxes	$27,360

Practice Corporation
Balance Sheet
March 31, 2019
Assets
Current Assets:
Cash	$6,060
Accounts Receivable	105,000
Inventory	25,200
Total Current Assets		$136,260
Plant and Equipment (net)		170,000
Total Assets		$306,260
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable	$39,900
Short-term Borrowing	27,000
Total Liabilities		$66,900
Stockholders' Equity:
Capital Stock	$185,000
Retained Earnings	54,360
Total Stockholder's Equity		239,360
Total liabilities and stockholders' equity		$306,260