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Toy World, Inc._spreadsheet - ( AnnualSales COGS/Sales...

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(Amounts in thousand of dollars) Annual Sales  10,000  COGS/Sales Margin Total $ Purchases $ Wages $   Seasonal Production 70.0%  7,000   3,000   4,000    Less direct labor savings  265   265  need to provide   Less elimination of overtime wage premium  225   225  need to provide   Level Production  6,510   3,000   3,510  calculate amounts under level production; what is estimated margin? Estimated margin under level production 65.1% Operating expenses Incurred evenly throughout the year Minimum cash balance  200  Credit line   Maximum amount  2,000    Clean-up period 30 days   Interest rate 9% p.a. Long-term debt   Interest rate 9.625%   Semi-annual principal payment  25      June & December Average collection period 60 days Purchases made one week in advance   1994 forecast  3,000  30% of sales   Terms 30 days   Monthly purchases  250  Capex amount = depreciation
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Table A Page 2 Table A:  Condensed Income Statements, 1991-1993 (thousands of dollars) 1991 1992 1993                                                             Net sales $5,213  $6,167  $7,967  Cost of goods sold 3,597  4,440  5,577  Gross profit $1,616  $1,727  $2,390  Operating expenses 1,199  1,542  1,912  Interest expense 68  75  85  Interest income 20  15  16  Profit before taxes $369  $125  $409  Federal income taxes 125  43  139  Net profit $244  $82  $270 
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Table B Page 3 Table B:  Balance Sheet at December 31, 1993 (thousands of dollars) Cash $200  Accounts receivable 2,905  Inventory 586  Current assets $3,691  Plant and equipment, net 1,176  Total assets $4,867  Accounts payable $282  Notes payable, bank 752  Accrued taxes(a) 88  Long-term debt, current portion 50  Current liabilities $1,172  Long-term debt 400  Shareholders' equity 3,295  Total liabilities and    shareholders' equity $4,867  (a)The company was required to make estimated tax payments on the 15th of April, June, September,  and December.  In 1993 it elected to base its estimated tax payments on the previous year's tax.  The  balance of $88,000 was due on March 15, 1994.
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Table C Page 4 Table C:  Monthly Sales Data (thousands of dollars) Sales Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1993 Actual $7,967  $64  88  96  88  87  95  96  1,251  1,474  1,723  1,965  940  1994 Projected $10,000  $120  140  160  140  140  140  160  1,620  1,840  2,140  2,285  1,115  1,060 
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Exhibit 1 Page 5 Exhibit 1 Pro Forma Balance Sheets Under Seasonal Production, 1994 (thousands of dollars) Actual Dec. 31, Note 1993 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Cash (a) $200  $878  $1,526  $1,253  $1,054  $915  $696  $527  $200  $200  $200  $200  $200  Accounts receivable (b) 2,905  1,060  260  300  300  280  280  300  1,780  3,460  3,980  4,425  3,400  Inventory (c) 586  586  586  586  586  586  586  586  586  586  586  586  586         Current assets $3,691  $2,524  $2,372  $2,139  $1,940  $1,781  $1,562  $1,413  $2,566  $4,246  $4,766  $5,211  $4,186  Net plant and  equipment (d) 1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176  1,176         Total assets $4,867  $3,700  $3,548  $3,315  $3,116  $2,957 
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