Management 122 Exam 2 - Fall 2008

Management 122 Exam 2 - Fall 2008 - Management 122 Fall...

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Management 122 Fall 2008 Danny S. Litt EXAM 2 Solutions I agree to have my grade posted by Student ID Number ________________ _________________ (Signature) (Student ID Number) Name: ________________ Section No: _____ PROBLEM POINTS SCORE 1 20 2 15 3 15 4 20 5 20 6 20 7 10 8 20 9 20 10 20 11 20 TOTAL 200
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M ANAGEMENT 122 N AME : __________________________ Page | 1 Problem 1 Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data re- garding the store's operations follow: Sales are budgeted at $330,000 for November, $300,000 for December, and $320,000 for January. Collections are expected to be 85% in the month of sale, 14% in the month following the sale, and 1% uncollectible. The cost of goods sold is 60% of sales. The company purchases 80% of its merchandise in the month prior to the month of sale and 20% in the month of sale. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,200. Monthly depreciation is $21,000. Ignore taxes. Statement of Financial Position October 31 Assets: Cash . ................................................................................................. $ 22,000 Accounts receivable (net of allowance for uncollectible accounts) . 83,000 Inventory . ......................................................................................... 158,400 Property, plant and equipment (net of $594,000 accumulated de- preciation) . .................................................................................... 1,004,000 Total assets $1,267,400 Liabilities and Stockholders’ Equity: Accounts payable . ............................................................................ $ 196,000 Common stock . ................................................................................ 620,000 Retained earnings . ............................................................................ 451,400 Total liabilities and stockholders’ equity . ........................................ $1,267,400 Requirements a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December. c. Prepare Cash Budgets for November and December. d. Prepare Budgeted Income Statements for November and December. e. Prepare a Budgeted Balance Sheet for the end of December.
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M ANAGEMENT 122 N AME : __________________________ Page | 2 Problem 1 Worksheet a. November December Sales . ............................................................... $330,000 $300,000 Schedule of Expected Cash Collections Accounts receivable . ....................................... $ 83,000 November sales . .............................................. 280,500 $ 46,200 December sales . ............................................... 255,000 Total cash collections . ................................... $363,500 $301,200 b. November December Cost of goods sold . .......................................... $198,000
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This note was uploaded on 04/28/2010 for the course MGMT 260510200 taught by Professor Davidlitt during the Winter '09 term at UCLA.

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Management 122 Exam 2 - Fall 2008 - Management 122 Fall...

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