Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis.  The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31, (the end of the prior quarter), the company’s general ledger showed the following account balances: 
   Cash $48,000 (debit)
   Accounts receivable $224,000 (debit)
   Inventory $60,000 (debit)
   Buildings and equipment, net $370,000 (debit)
   Accounts payable $93,000 (credit)
   Capital stock $500,000 (credit)
   Retained earnings $109,000 (credit)
2. Actual sales for December and budgeted sales for the next four months are as follows:  December $280,000, January $400,000, February $600,000, March $300,000 and April $200,000.
3. Sales are 20% for cash and 80% on credit.  All payments on credit sales are collected in the month following sale.  The accounts receivable at December 31 are a result of December credit sales.
4. The company’s gross margin is 40% of sales.  (In other words, cost of goods sold is 60% of sales.) 
5. Monthly expenses are budgeted as follows:  salaries and wages, $27,000 per month; advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales.  Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 per quarter.
6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.
7. One-half of the month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
8. During February, the company will purchase a new copy machine for $1,700 cash.  During March, other equipment will be purchased for cash at a cost of $84,500.
9. During January, the company will declare and pay $45,000 in cash dividends.
10. Management wants to maintain a minimum cash balance of $30,000.  The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month.  The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded.  The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter. Submit your responses in an Excel spreadsheet:

1. Schedule of expected cash collections
2. Merchandise purchases budget

1. Schedule of expected cash disbursements-merchandise purchases

1. Schedule of expected cash disbursements-selling and administrative expenses

1. Cash budget:

Provide your answers in a clearly organized Excel spreadsheet. Provide your answers in a clearly organized Excel spreadsheet

1.  A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?

2.  KCCO, Inc., has current assets of $5,000, net fixed assets of $23,000, current liabilities of $3,500, and long-term debt of $7,900.

a.       What is the value of the shareholders’ equity account for this firm?

b.      How much is net working capital?

3.  Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.3 million. Klingon’s current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. If all the current assets were liquidated today, the company would receive $1.25 million cash.

a.       What is the book value of Klingon’s total assets today?

b.      What is the market value?

4.  The tax rates are as shown.

Taxable Income         Tax Rate

$0 – 50,000   15%

50,001 – 75,000        25%

75,001 – 100,000      34%

100,001 – 335,000   39%

Your firm currently has taxable income of $80,000. How much additional tax will you owe if you increase your taxable income by $21,200?

5.  A firm has sales of $4,300, net income of $320, total assets of $4,800, and total equity of $2,950. Interest expense is $65. What is the common-size statement value of the interest expense?

6.  You are given the following information for Dawn Corp.:

  Decrease in inventory        $          500    

  Decrease in accounts payable                   200    

  Increase in notes payable              185    

  Increase in accounts receivable                215    

a.       Did cash go up or down? By how much?

7.  The following information pertains to Galaxy Interiors:

What is the cash flow to creditors for 2015?

8. 

9. 

10.  The following information pertains to Galaxy Interiors:

a.  What is the amount of dividends paid for 2015?

11.  A firm has sales of $1,150, net income of $219, net fixed assets of $530, and current assets of $286. The firm has $94 in inventory. What is the common-size statement value of inventory?

12.  You have gathered this information on JJ Enterprises:

a.  What is the cash flow from assets for 2015?

13.  Jupiter Explorers has $10,400 in sales. The profit margin is 4 percent. There are 4,600 shares of stock outstanding. The market price per share is $1.80. What is the price-earnings ratio?

Unit IV Scholarly Activity

Address all three of the following writing prompts. Your responses to your three chosen prompts should be at least 350 words each. No title page is needed, but be sure to indicate which writing prompts you are addressing at the top of each response. Each response needs its own reference page.

Writing Prompts (respond to all three):

1. Review the Reading Assignment titled as “Pollution Prevention Practices in Oregon’s Electronics Industry” by Harding and Jones. In your review, include:

 an overview of the article,

 benefits of using pollution prevention in the electronics industry,

 specific process modifications discussed in the article,

 chemical substitutions mentioned in the article,

 economics of making the suggested changes, and

 reasons companies might not embrace pollution prevention

2. Review the Reading Assignment titled as “Optimal Deployment of Emissions Reduction Technologies for Construction Equipment” by Barl, Zietsman, Quadrifoglio, and Farzaneh. In your review:

 Write an overview of the article.

 Describe hydrogen enrichment (HE), selective catalytic reduction (SCR), and fuel additive (FA) technologies.

 Describe the advantages and disadvantages of HE, SCR, and FA, including a discussion of costs.

 Does the computer model do a satisfactory job of determining the best technology? Explain.

 What would be your recommendations as far as which technology (HE, SCR, and/or FA) should be used, or should none be used?

3. Review the Reading Assignment titled as “Flue Gas Desulfurization: The State of the Art” by Srivastava and Jozewicz. In your review:

 Write an overview of the article.

 Describe flue gas desulfurization (FGD) at coal-fired power plants and why it is used.

 Explain the details of one once-through process and one regenerable process.

 Summarize the section titled “The MEL [magnesium enhanced slurry] Cost Model.”

 Discuss how the article is useful to a pollution prevention manager.

 Conduct an Internet search to explain the concept of Best Available Technology (BAT) and whether any of the FGD processes described in the article are considered BATs.

You are required to use at least your textbook as source material for all of your responses. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.