please help me! I have no idea what to do. I have to: 1. prepare income statemen
ID: 2569521 • Letter: P
Question
please help me! I have no idea what to do. I have to:
1. prepare income statements for the first two months of the stores operation as well as for its first year.
2. prepare a cash budget for the firm for its first twelve months operation.
lastly,
3. prepare a balance sheet for the beginning and end of its first year.
PLEASE HELP.
Management 475: Cash Budgeting Exercise Nilpoj Furniture Co. Janice Nilpoj plans to open a home furnishings store with the assistance of her rich uncle, who will provide all of the cash needed to open the store. They will share 100% ownership of the business. Ms. Nilpoj estimated her sales revenues for the first three years of operation, as shown below: Year Month Sales Revenue $40,000 20,000 24,000 28,000 32,000 36,000 40,000 44,000 48,000 52,000 56,000 6 10 12 S/T $480,000 $640,000 $800,000 Her research into this industry enabled her to assume that her cost of goods sold will be 60% of sales revenue. (For example, this means that the cost to Nilpoj of the furniture sold in month 1 is $24,000.) Having forecast sales and costs of goods sold, Ms. Nilpoj next estimated the cost of fixed and current assets that she will need to support these sales: Construct a one-story, free-standing building with 5,000 ft2 of floor space to display and store furniture and put in an asphalt parking lot. Cost: $332k at month O . Keep a base inventory of furniture that is equal to twice the average monthly forecast of sales revenue for year 1; in addition, buy enough inventory monthly to cover the following month's sales forecast. She plans to pay for all inventory in the month that it is purchased. Cost: $72k at month 0 Calculation: ((($480k/12mos)"60%-2mos.) + (S40k"60%) Finance customers who buy on credit. The entrepreneur is assuming that all sales will be credit sales, with customers taking one month to pay on the average. This is the industry's average collection period. . Purchase fixtures, office equipment, and a delivery truck. Cost: $52k at month 0 . Pay for other expenses/fees totalling $24k at month 0. (lawyer's fee for incorporation: $4k; accountant's fee to set up record keeping system: $2k; buy 3 year prepaid insurance policy: $12k; buy necessary licenses: $2k; promote grand opening: $4k)Explanation / Answer
)
Nilpoj and Co
Net Profit/loss
-22480
-26480
)
Nilpoj and Co
Month 1 Month 2 Income Statements Sales 40000 20000 less Cost of sales 24000 12000 Gross profit 16000 8000 Expenses: Promotion 4000 Salary Nilpoj 4800 4800 Part-time wages 2400 2400 Advertising 1200 1200 Utilities 800 800 Delivery 800 800 Professional services 800 800 Supplies 400 400 Miscellaneous 1600 1600 Depreciation: Building 13280 13280 Parking lot 32000 3200 3200 Equipment 52000 5200 5200 Total expenses 38480 34480Net Profit/loss
Nilpoj and Co Year 1 Income Statement Sales 480000 less Cost of sales 288000 Gross profit 192000 Expenses: Promotion 4000 Salary Nilpoj 57600 Part-time wages 28800 Advertising 14400 Utilities 9600 Delivery 9600 Professional services 9600 Supplies 4800 Miscellaneous 19200 0 Depreciation: 0 Building 159360 Parking lot 38400 Equipment 62400 Total expenses 417760 Net Profit/loss -225760-22480
-26480
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.