Shady Lady Budget Project Required: Construct a profit plan for th...

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Shady Lady Budget Project Required: Construct a profit plan for the first 6 months of 2019 using the templates provided for Shady Lady, Inc (a fictional company). This must be completed in Excel. Assume it is the beginning of the year. This project must include all of the following schedules: 1. Sales Forecast and Budget 2. Cash Receipts Budget 3. Purchase Budget 4. Budgeted Inventory and Cost of Goods Sold 5. Cash Purchases Disbursements Budget 6. Operating Expense Budget 7. Summary Cash Budget 8. Budgeted Income Statement Notes and Hints 1) All 8 schedules must be submitted. The schedules/budgets must be prepared on Excel using the template as is. 2) Part of this project is demonstrating proper use of Excel. You will input a "hard number" or a formula (your choice) into all pink cells. All yellow cells must be formula based (no numbers included - use appropriate cell referencing). You must include a copy of the formula version of the project or you will receive a 0 (zero). In Excel, copy the worksheet to a new tab, and then, just click on the Formulas tab at the top and then click on "Show Formulas". You will have 2 worksheets in your submission file. 3) I recommend constructing the formulas for one month and then copying the formulas over to the remaining months. 4) Rounding is encouraged and you may ignore interest and taxes. 5) The budget templates and this instruction sheet are located in Assignments in Canvas. Make sure you save the file to excel and then open the file through Excel (not Internet Explorer or other browser). 6) Check figures are also located on page 3. INFORMATION FOR SHADY LADY, BUDGET PROJECT 1. Shady Lady, Inc. is a company that re-sells one product, an extraordinarily large and colorful sun shade umbrella. An overseas contractor makes the product exclusively for Shady Lady; so, Shady Lady has no manufacturing- related costs. 2. As of 11/18, each sun shade umbrella costs Shady Lady $6 per unit. Shady Lady currently sells each umbrella for $12 per unit. 3. The estimated sales (in units) are as follows: Nov-18 21,150 Dec-18 22,150 Jan-19 21,000 Feb-19 24,150 Mar-19 24,000 Apr-19 24,500 May-19 27,000 Jun-19 28,150 Jul-19 31,150 4. Per an existing contract, the cost of each umbrella is scheduled to increase by 20% on March 1, 2019. To offset this increase, the company plans to raise the sales price by $2.00 per unit beginning April 1, 2019. The sales forecast (i.e., estimated sales in units) takes this price increase into account. 5. Thirty percent of any month's sales are for cash, and the remaining 70% are on credit. Thirty percent of the credit sales are collected in the month of sale, 50% are collected in the following month, and 16% are collected in the second month after the sale. The remaining receivables are deemed uncollectible. Bad debts are written off in the month the debt is deemed uncollectible (e.g. if the sale is made in January and is not collected by the end of March, it is written off in March.) No accrual for estimated bad debts is made in the month of sale. 6. The firm's policy regarding inventory is to stock (i.e. have in ending inventory) 60% of the forecasted demand in units (i.e., estimated sales) for the next month. 7. 40% of the inventory purchases are paid for in the month of purchase and the remaining 60% are paid in the following month (i.e. all of the previous month's Accounts Payable are paid off by the end of any month.) 8. $ 90,000 Equipment will be purchased in January requiring a cash payment due in January. Another payment of $80,000 is due in February. $ 13,000 of dividends are to be paid in March 9. Monthly operating expenses consist of the following (if these are cash expenses, they are paid when incurred): Salaries and Wages $4,000 9% of sales Sales Commissions revenue Rent $7,000 Other Variable Cash 4% of sales Expenses revenue Supplies Expense: $2,000 See note Other Overhead $45,000 Exps: See note Note: Other general and administrative overhead expenses are expected to be $45,000 per month. Of this amount, $25,000 represents depreciation, a non-cash expense. The company maintains on hand one month's worth of supplies. 10. The company must maintain a minimum cash balance of $20,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount borrowed and pay off any loans as soon as possible. 11. Cash on hand as of December 31, 2018 was $15,000. In addition, there were no notes payable as of this date. 12. Check Figures 2019: Cash Receipts Budget Total Cash Receipts, January: 249,976 Total Cash Receipts, Jan - June: 1,817,258 Uncollectible/bad debt exp, January: 7,106 Uncollectible/bad debt exp, Jan - June: 47,387 Purchase Budget Total Purchases, Jan - June: 1,058,868 Cash Budget Total Cash Disbursements, Jan - June: 1,640,577 Ending Cash Balance, June: 20,681 Budgeted Income Statement Operating Expenses, Total: 648,224 Net Income, Total: 296,776

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