Question Details

[answered] Lulu's Lemons Ltd. sells vehicles. The company is plan


  • Lulu?s Lemons Ltd. sells vehicles. The company is planning its cash needs for the month of January, 2015. In the past, Lulu?s has had to borrow money during the post-Christmas season to offset a significant decline in sales.? The following information has been assembled to assist in preparing a cash flow forecast for January.
  • January 2015 income statement:

Sales??????????????????????????????????????????????????????????????? $500,000

Cost of goods sold?????????????????????????????????????? ? 350,000

Gross profit???????????????????????????????????????????????????? 150,000

Variable selling expenses?????????? $25,000

Fixed administrative expenses???? 30,000?? ?? 55,000

Forecast net operating income?????????????????? $95,000

  • Sales are 100% on credit.
  • Credit sales are collected over a three-month period: 30% is collected in the following month, 20% in the second month following sale, and 40% in the third month following sale. 10% of sales revenue is never collected. October 2014 sales totaled $600,000. November sales totaled $600,000 and December sales totaled $700,000.
  • 100% of a month?s inventory purchases are paid in the following month. Accounts payable relate solely to inventory purchases. At December 31, accounts payable totaled $422,500.
  • The company maintains its ending inventory levels at 150% of the cost of the merchandise to be sold in the following month. The merchandise inventory at December 31, 2014 was $525,000. February 2015 sales are budgeted at $400,000. Gross profit is expected to decline from the usual 30% to 25%.
  • The company pays $10,000 cash dividends to shareholders each month.
  • The cash balance at December 31 was $30,000; the company must maintain a cash balance of at least this amount at the end of each month.
  • The company can borrow and repay its operating loan in increments of $10,000 at the end of each month, up to a total loan balance of $500,000. The interest rate on this loan is 1/2% per month. The operating loan balance at December 31 is $50,000.

Required: Prepare a cash flow forecast for Lulu?s for January 2015, formatted as in chapter 10 of the managerial accounting text. Include appropriate supporting schedules.

 


Solution details:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 18, 2020

PRICE: $15

Solution~0001013362.zip (25.37 KB)

Buy this answer for only: $15

This attachment is locked

We have a ready expert answer for this paper which you can use for in-depth understanding, research editing or paraphrasing. You can buy it or order for a fresh, original and plagiarism-free copy from our tutoring website www.aceyourhomework.com (Deadline assured. Flexible pricing. TurnItIn Report provided)

Pay using PayPal (No PayPal account Required) or your credit card . All your purchases are securely protected by .
SiteLock

About this Question

STATUS

Answered

QUALITY

Approved

DATE ANSWERED

Sep 18, 2020

EXPERT

Tutor

ANSWER RATING

GET INSTANT HELP/h4>

We have top-notch tutors who can do your essay/homework for you at a reasonable cost and then you can simply use that essay as a template to build your own arguments.

You can also use these solutions:

  • As a reference for in-depth understanding of the subject.
  • As a source of ideas / reasoning for your own research (if properly referenced)
  • For editing and paraphrasing (check your institution's definition of plagiarism and recommended paraphrase).
This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student.

NEW ASSIGNMENT HELP?

Order New Solution. Quick Turnaround

Click on the button below in order to Order for a New, Original and High-Quality Essay Solutions. New orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

WE GUARANTEE, THAT YOUR PAPER WILL BE WRITTEN FROM SCRATCH AND WITHIN YOUR SET DEADLINE.

Order Now