Excel Project Instructions
Assume
ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet
but to also provide pro-forma financial statements for 2018. In addition, they
have asked you to evaluate their company based on the pro-forma statements with
regard to ratios. They also want you to evaluate 3 projects they are
considering. Their information is as follows:
End
of the year information:
Account |
12/31/17 Ending Balance |
Cash |
50,000 |
Accounts Receivable |
175,000 |
Inventory |
126,000 |
Equipment |
480,000 |
Accumulated Depreciation |
90,000 |
Accounts Payable |
156,000 |
Short-term Notes Payable |
12,000 |
Long-term Notes Payable |
200,000 |
Common Stock |
235,000 |
Retained Earnings |
solve |
Additional Information:
·
Sales
for December total 10,000 units. Each month’s sales are expected to exceed the
prior month’s results by 5%. The product’s selling price is $25 per unit.
·
Company
policy calls for a given month’s ending inventory to equal 80% of the next
month’s expected unit sales. The December 31 2017 inventory is 8,400 units,
which complies with the policy. The purchase price is $15 per unit.
·
Sales
representatives’ commissions are 12.5% of sales and are paid in the month of
the sales. The sales manager’s monthly salary will be $3,500 in January and
$4,000 per month thereafter.
·
Monthly
general and administrative expenses include $8,000 administrative salaries,
$5,000 depreciation, and 0.9% monthly interest on the long-term note payable.
·
The
company expects 30% of sales to be for cash and the remaining 70% on credit.
Receivables are collected in full in the month following the sale (none is
collected in the month of sale).
·
All
merchandise purchases are on credit, and no payables arise from any other
transactions. One month’s purchases are fully paid in the next month.
Sun | Mon | Tue | Wed | Thu | Fri | Sat |
---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 |
8 | 9 | 10 | 11 | 12 | 13 | 14 |
15 | 16 | 17 | 18 | 19 | 20 | 21 |
22 | 23 | 24 | 25 | 26 | 27 | 28 |
29 | 30 | 1 | 2 | 3 | 4 | 5 |