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Midterm Problems Finmar

Practice Problems Finmar

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28 views

Midterm Problems Finmar

Practice Problems Finmar

Uploaded by

mingyu universe
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Problem 18 Problem 19

a January 8,500 x (9% / 12) = 63.75 12.19%


February 2,500 x (10% / 12) = 20.83
March 3,500 x (13% / 12) = 37.92
April 8,500 x (16% / 12) = 113.33
May 9,500 x (12% / 12) = 95.00
June 4,500 x (12% / 12) = 45.00
Total Interest 37,000 375.83

b January 8,500 x 1% = 85.00


February 2,500 x 1% = 25.00
March 3,500 x 1% = 35.00
April 8,500 x 1% = 85.00
May 9,500 x 1% = 95.00
June 4,500 x 1% = 45.00
Total Interest 370.00
Sales 15% Cash Sales 85% Prior Month Sales Total
January 65,000 9,750.00 63,750.00 73,500.00
February 55,000 8,250.00 55,250.00 63,500.00
March 100,000 15,000.00 46,750.00 61,750.00
April 45,000 6,750.00 85,000.00 91,750.00
Total 265,000 39,750.00 250,750.00 290,500.00
a Beginning Production Sales Ending
Jan 25,000 12,600 20,000 17,600
Feb 17,600 12,600 18,600 11,600
Mar 11,600 12,600 5,000 19,200
Apr 19,200 12,600 5,000 26,800
May 26,800 12,600 4,000 35,400
Jun 35,400 12,600 7,000 41,000
Jul 41,000 12,600 9,000 44,600
Aug 44,600 12,600 9,000 48,200
Sep 48,200 12,600 11,000 49,800
Oct 49,800 12,600 17,000 45,400
Nov 45,400 12,600 21,000 37,000
Dec 37,000 12,600 24,600 25,000

30% Cash 70% Prior


b Sales Sales Month Sales Total
Jan 100,000 30,000 70,000 100,000
Feb 93,000 27,900 70,000 97,900
Mar 25,000 7,500 65,100 72,600
Apr 25,000 7,500 17,500 25,000
May 20,000 6,000 17,500 23,500
Jun 35,000 10,500 14,000 24,500
Jul 45,000 13,500 24,500 38,000
Aug 45,000 13,500 31,500 45,000
Sep 55,000 16,500 31,500 48,000
Oct 85,000 25,500 38,500 64,000
Nov 105,000 31,500 59,500 91,000
Dec 123,000 36,900 73,500 110,400

c Jan
Production cost 25,200
Other cash payments 45,000
Total 70,200

d Jan Feb Mar Apr


Net Cash 29,800.00 27,700.00 2,400.00 - 45,200.00
Beginning cash 5,000.00 34,800.00 62,500.00 64,900.00
Cumulative Cash 34,800.00 62,500.00 64,900.00 19,700.00
Monthly Loan - - - -
Cumulative Loan - - - -
Ending Cash Balance 34,800.00 62,500.00 64,900.00 19,700.00
Sales 756,000
SP 5
Sales in units 151200
Production per month 12600

May Jun Jul Aug Sep Oct


- 46,700.00 - 45,700.00 - 32,200.00 - 25,200.00 - 22,200.00 - 6,200.00
19,700.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
- 27,000.00 - 40,700.00 - 27,200.00 - 20,200.00 - 17,200.00 - 1,200.00
32,000.00 45,700.00 32,200.00 25,200.00 22,200.00 6,200.00
32,000.00 77,700.00 109,900.00 135,100.00 157,300.00 163,500.00
5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Nov Dec
20,800.00 40,200.00
5,000.00 5,000.00
25,800.00 45,200.00
- 20,800.00 - 40,200.00
142,700.00 102,500.00
5,000.00 5,000.00
a Inventory increase 360,000
x interest 11%
Increase cost 39,600

Savings 36,000
Less: Increased cost 39,600
Loss - 3,600

b 36,000 / 360,000
10%
a Level of AR = Increase in sales / AR Turnover
Level of AR = 65,000 / 4
Level of AR = 16,250

b Increase in sales 65,000


Less: Costs
Production cost 48,100
Uncollectible 5,850
Collection cost 3,900
Income before tax 7,150
Less: tax 1,430
Income after tax 5,720

ROI = 5,720/16,250
ROI = 35.20% > 16%

c Yes

d Investment in inventory (65,000/2) 32,500


total incremental investment
AR 16,250
Inventory 32,500
Incremental Investment 48,750

e 0.117333 NO
a Increase in sales 180,000
Less: Costs
Uncollectible 21,600
Collection 16,200
Production 129,600 167,400
Income before tax 12,600
Less: Tax 4,284
Income after tax 8,316

Asset turnover = 365 / Ave. Collection period


Asset turnover = 365 / 120
Asset turnover = 3.04

Level of AR = 180,000 / 3
Level of AR = 60,000

ROI = 8,316/60,000
ROI = 13.86% > 10%
Credit Sales per day = Credit Sales/360

AR = 500 x 60
AR = 30,000

AR Turnover = Credit sales / AR


AR Turnover = 180000/30000
6

23 AR = 500 x 18
AR = 9,000

24 Savings (30,000 - 9,000) x 12% 2,520.00


Cost (180,000 x 3%) 5,400.00
Loss - 2,880.00

25 New sales (180,000 x 1.15) 207,000.00

AR (207,000/360)x18 10,350.00

Savings (30,000 - 10,350) x 12% 2,358.00


Inc. profit (207,000 X 20%) 41,400.00
Less: Discount (207,000 x 3%) 6,210.00
Increase in income 37,548.00

YESS
er day = Credit Sales/360
500

= Credit sales / AR
= 180000/30000

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