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Experience:  I have a MBA degree in Organizational Leadership. I also have 12 years related work experience in Management.
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Victorias Apparel has forecast credit sales for the fourt

Customer Question

Victoria's Apparel has forecast credit sales for the fourt quarter of the year as:
_________________________________

September (actual)...............$50,000

Fourth Quarter

October..............................$40,000

November............................ 35,000

December............................ 60,000

___________________________________

Experience has shown that 20% of sales receipts are collected in the month of sale, 70% in the following month, and 10% are never collected. Prepare a schedule of cash receipts for Victoria's Apparel covering the fourth quarter (October through December).




The Manning Company has financial statements as shown below, which are representative of the company's historical average.
The firm is expecting a 20 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales.
Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and pay out ratio must be found from the income statement.)

Income Statement
Sales..........................$200,000
Expenses.....................$158,000
Earnings before interest and taxes................$42,000
Interest..........................$7,000
Earnings before taxes........................$35,000
Taxes.................................$15,000
Earnings after taxes.........................$20,000
Dividends.............................$6,000

Balance Sheet
Assets
Cash...........................$5,000
Accounts receivable...................$40,000
Inventory...........................$75,000
Current assets..................$120,000
Fixed assets....................$80,000
Total assets.....................$200,000

Liabilities and Stockholders' equity
Accounts payable.............................$25,000
Accrued wages............................$1,000
Accrued taxes...................................$2,000
Current liabilities.................................$28,000
Notes payable..........................$7,000
Long-term debt..................$15,000
Common stock.......................$120,000
Retained earnings.................................$30,000
Total liabilities and stockholders' equity......................$200,000
Submitted: 5 years ago.
Category: Homework
Expert:  nest9 replied 5 years ago.
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