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PP #6. The Sharpe Corporations projected sales for the

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PP #6. The Sharpe Corporation’s projected...
PP #6.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 90,300
February 120,300
March 134,300
April 240,900
May 300,600
June 270,900
July 224,200
August 150,600

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,900 (Nov) and \$176,000 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,600 per month for rent and \$19,300 each month for other expenditures. Tax prepayments of \$22,300 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$32,300; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (11%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,190 these funds would be borrowed at the beginning of April with interest of \$552 (i.e. 11%*1/12*\$60,190) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period ________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing ________ (December= 21300)
New Financing Needed________
Financing needed for period________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$199,400 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

PP #7.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 90000
February 120000
March 135000
April 240000
May 300000
June 270000
July 225000
August 150000

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$220,000 (Nov) and \$175,000 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,000 per month for rent and \$20,000 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$22,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,500 these funds would be borrowed at the beginning of April with interest of \$605 (i.e. 12%*1/12 *\$60,500) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period ________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing ________ (December= 22000)
New Financing Needed________
Financing needed for period ________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

P #6A.

The Sharpe Corporation’s projected sales for the first eight months of 2011 are as follows:

January 89900
February 119500
March 134900
April 239100
May 300700
June 269000
July 225900
August 150600

Of Sharpe’s sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,100 (Nov) and \$175,600 (Dec) respectively. Sharpe purchases it’s raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays \$9,300 per month for rent and \$19,500 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company’s cash balance at December 31, 2010 was \$21,500; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (10%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$55,710 these funds would be borrowed at the beginning of April with interest of \$464 (i.e. 10%*1/12 *\$55,710) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.
Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________
Cash Receipts________
Sales for Cash (10%)________
First month after sales (60%)________
Second month after sales (30%)________
Total Cash Receipts________
Cash disbursements________
Raw materials________
Rent________
Other Expenditures________
Tax prepayments________
Total Cash Disbursement________
Net Change in Cash________
Net change in cash for period________
(+) Beginning cash balance________
(-) Interest on short-term borrowing________
(-) Short-term borrowing repayments________
(=) Ending cash balance b/borrowing________ (December= 21000)
New Financing Needed________
Financing needed for period________
Ending cash balance________
Cumulative borrowing________

B.) Sharpe has \$199,200 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________
Submitted: 5 years ago.Category: Multiple Problems
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4/11/2012
Business Tutor: linda_us, Master's Degree replied 5 years ago
linda_us, Master's Degree
Category: Multiple Problems
Satisfied Customers: 7,291
Experience: A tutor for Business, Finance, Accounts and other related topics.
Verified

Hi

Regards

Linda

Customer reply replied 5 years ago
I have to have them by 4/14 but the sooner the better.
Customer reply replied 5 years ago
Also, if it isn't too much trouble I would apprecitate some notes on how you arrived at the calculations. I would like to not have to ask for help on similar problems for future as I beleive it is important that I know how to do them too.
Business Tutor: linda_us, Master's Degree replied 5 years ago
I can help you with these but the amount you are currently offering does not compensate for the work involved. Please consider revising your offer.
Customer reply replied 5 years ago
I will look at compensating you more once I get paid this Friday. I live on a tight budget and this is what I can do at this point, but I will know more Friday. I appreciate your help with these problems! I look forward to reviewing your solutions.
Business Tutor: linda_us, Master's Degree replied 5 years ago
Customer reply replied 5 years ago

Hi Linda!

I was just following up on the problems that you are helping me with. Are you close to having those for me? These are due tomorrow, so I just want to make sure that I get them submitted on time.

Also, I looked at my account and I can compensate you \$35 for these solutions. So I will increase that amount once I receive the solutions.

Thanks so much!!!

Business Tutor: linda_us, Master's Degree replied 5 years ago
Sure. I will post today.

Regards

Linda
Business Tutor: linda_us, Master's Degree replied 5 years ago
Please check the beginning balance for each scenario? There is some discrepancy in the data?
Customer reply replied 5 years ago
I am headed to job #2 right now so I willcheck the numbers for any discrepancies and let you know as soon as I can.
Business Tutor: linda_us, Master's Degree replied 5 years ago
Let me know by tonight as I need to finish this assignment today itself as I might not be available tomorrow.

Regards

Linda
Customer reply replied 5 years ago
Ok..I'm almost to work so I will get on the computer and check real quick.
Business Tutor: linda_us, Master's Degree replied 5 years ago
Thanks
Customer reply replied 5 years ago
It appears as if the information is correct. I can have the due date extended to Sunday. Can I check with my professor on the data and post his response by tomorrow for you. Then have you post the solution by Sunday?
Business Tutor: linda_us, Master's Degree replied 5 years ago
Thank you for the up date. But if we take the Opening Cash Balance for question 3 then the loan amount given in the question does not match.
Customer reply replied 5 years ago
I trust that you are correct. I will email my professor right away and post his response ASAP. could you complete this on Sunday if I get back.to you on Sunday?
Customer reply replied 5 years ago
Correction....if I post his response tomorrow can you post the solution to question 3 on Sunday?

Also do you have the first two done? Of so can you posy for my review in the meantime?
Business Tutor: linda_us, Master's Degree replied 5 years ago
Even within the question see this

Question PP #6.

"The company’s cash balance at December 31, 2010 was \$32,300"
(=) Ending cash balance b/borrowing ________ (December= 21300)

P #6A.
The company’s cash balance at December 31, 2010 was \$21,500
(=) Ending cash balance b/borrowing________ (December= 21000)

I can prepare a solution in such a way that you just need to change opening cash balance and everything would be adjusted automatically (I will highlight the part that need to be changed in green) or I wait for the information from your professor.

Let me know what suits you.

Regards

Linda
Customer reply replied 5 years ago
Oh wow! Maybe that's why I had trouble figuring it out!. I will just post the answer from the professor tomorrow and look for your response by Sunday! Sorry for the confusion! But thanks so much!
Business Tutor: linda_us, Master's Degree replied 5 years ago
Ok..I might be available tomorrow in the day but will be back around 8 pm EST. Do not worry I will complete your assignment before Sunday afternoon.

Regards

Linda
Customer reply replied 5 years ago
You are wonderful! Thank you!
Business Tutor: linda_us, Master's Degree replied 5 years ago
Thank you so much..
Customer reply replied 5 years ago

Hi Linda-

Here is the revised problems from the professor!:

PP #6.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 90,300

February 120,300

March 134,300

April 240,900

May 300,600

June 270,900

July 224,200

August 150,600

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,900 (Nov) and \$176,000 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,600 per month for rent and \$19,300 each month for other expenditures. Tax prepayments of \$22,300 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$21,300; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (11%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,190 these funds would be borrowed at the beginning of April with interest of \$552 (i.e. 11%*1/12*\$60,190) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Shapre covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period ________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing ________ (December= 21300)

New Financing Needed________

Financing needed for period________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$199,400 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

PP #7.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 90000

February 120000

March 135000

April 240000

May 300000

June 270000

July 225000

August 150000

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$220,000 (Nov) and \$175,000 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays\$10,000 per month for rent and \$20,000 each month for other expenditures. Tax prepayments of \$22,500 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$22,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (12%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$60,500 these funds would be borrowed at the beginning of April with interest of \$605 (i.e. 12%*1/12 *\$60,500) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Sharpe covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period ________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing ________ (December= 22000)

New Financing Needed________

Financing needed for period ________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$200,000 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

P #6A.

The Sharpe Corporation's projected sales for the first eight months of 2011 are as follows:

January 89900

February 119500

March 134900

April 239100

May 300700

June 269000

July 225900

August 150600

Of Sharpe's sales, 10% is for cash, another 60% is collected in the month following the sale, and 30% is collected in the second month following the sale. November and December sales for 2010 were \$219,100 (Nov) and \$175,600 (Dec) respectively. Sharpe purchases it's raw materials two months in advance of its sales equal to 60% of their final sales price. The supplier is paid one month after it makes delivery. For example, purchases for April sales are made in February and payment is made in March. In addition, Sharpe pays \$9,300 per month for rent and \$19,500 each month for other expenditures. Tax prepayments of \$21,500 are made each quarter, beginning in March. The company's cash balance at December 31, 2010 was \$21,000; a minimum balance of \$15,000 must be maintained at all times. Assume that any short-term financing needed to maintain the cash balance is paid off in the month following the month of financing if sufficient funds are available. Interest on short-term loans (10%) is paid monthly. Borrowing to meet estimated monthly cash needs takes place at the beginning of the month. Thus, if in the month of April the firm expects to have a need for an additional \$55,710 these funds would be borrowed at the beginning of April with interest of \$464 (i.e. 10%*1/12 *\$55,710) owed for April being paid at the beginning of May.

A.) Prepare a cash budget for Sharpe covering the first seven months of 2011.

Complete (month by month) the cash budget below: (Round to the nearest dollar)

Sales________ Cash Receipts________

Sales for Cash (10%)________

First month after sales (60%)________

Second month after sales (30%)________

Total Cash Receipts________

Cash disbursements________

Raw materials________

Rent________

Other Expenditures________

Tax prepayments________

Total Cash Disbursement________

Net Change in Cash________

Net change in cash for period________

(+) Beginning cash balance________

(-) Interest on short-term borrowing________

(-) Short-term borrowing repayments________

(=) Ending cash balance b/borrowing________ (December= 21000)

New Financing Needed________

Financing needed for period________

Ending cash balance________

Cumulative borrowing________

B.) Sharpe has \$199,200 in notes payable due in July that must be repaid or renegotiated for an extension. Will the firm have ample cash to repay the notes?_____________

Business Tutor: linda_us, Master's Degree replied 5 years ago
Thanks.
Business Tutor: linda_us, Master's Degree replied 5 years ago

Please note that I get credit for my work only when you click accept.

As discussed you can add the remaining amount as Bonus.

Regards

Linda
linda_us, Master's Degree
Category: Multiple Problems
Satisfied Customers: 7,291
Experience: A tutor for Business, Finance, Accounts and other related topics.
Verified
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Category: Multiple Problems
Satisfied Customers: 7,291
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Experience: A tutor for Business, Finance, Accounts and other related topics.

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DSW is a midsized coal mining company with 20 mines located in Hessen region in central Germany. The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market.The coal mining industry, especially high-sulfur coal operations such as DSW, has been hard-hit by environmental regulations and warmer than expected winter 2013/2014 and 2014/2016. Recently, however, a combination of increased demand for coal and new pollution reduction technologies has led to an improved market demand for high-sulfur coal. DSW has just been approached by SudenKraftwerk Company with a request to supply coal for its electric generators for the next four years. DSW does not have enough excess capacity at its existing mines to guarantee the contract. The company is considering opening a strip mine in Broken on 5,000 acres of land purchased 10 years ago for € 5 million. Based on a recent appraisal, the company feels it could receive € 6.2 million on an after-tax basis if it sold the land today.Strip mining is a process where the layers of topsoil above a coal vein are removed and the exposed coal is removed. Changes in mining regulations now force a company to reclaim the land; that is, when the mining is completed, the land must be restored to near its original condition. The land can then be used for other purposes. Because it is currently operating at full capacity, DWS will need to purchase additional necessary equipment, which will cost € 78 million. The equipment will be depreciated on a seven-year linear basis. The contract runs for only four years. At that time the coal from the site will be entirely mined. The company feels that the equipment can be sold for 60 percent of its initial purchase price in four years. However, DSW plans to open another strip mine at that time and will use the equipment at the new mine.The contract calls for the delivery of 500,000 tons of coal per year at a price of €85 per ton. DWS feels that coal production will be 620,000 tons, 680,000 tons, 690,000 tons, and 590,000 tons, respectively, over the next four years. The excess production will be sold in the spot market at an average of € 80 per ton but the spot prices are highly volatile. The fact should be taken into consideration in the analysis. Variable costs amount to € 27 per ton, and fixed costs are € 3,700,000 per year. The mine will require net working capital (NWC) level of 5 percent of sales. The NWC will be built up in the year prior to the sales.DSW will be responsible for reclaiming the land at termination of the mining. This will occur in year 5. The company uses an outside company for reclamation of all the company's strip mines. It is estimated the cost of reclamation will be € 2.4 million. After the land is reclaimed, the company plans to donate the land to the state for use as a public park and recreation area. This will occur in year 6 and result in a charitable expense deduction of € 6.5 million. DSW faces a 19 percent tax rate. Assume that a loss in any year will result in a tax credit.You have been approached by the CFO of the company with a request to analyze the project.Calculate the payback period, profitability index, net present value, internal rate of return for the new strip mine. Please prepare also sensitivity analysis for the project assuming that the WACC of the company equals 10%Should DSW Mining take the contract and open the mine taking into consideration the risk of the project? … read more
F. Naz
B.Com
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On January 1, 2014, Seller Corp and Buyer Corp closed on the
On January 1, 2014, Seller Corp and Buyer Corp closed on the sale of a factory building for \$30,000,000 with the following payment terms: Buyer Corp paid \$3,000,000 at closing. Buyer Corp assumed \$7,0… read more
Dr. Donna Kakonge
Doctor of Education
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I need help with accounting homework, Business Transactions
Business Transactions for May 1978: May 1 XXXXX XXXXXpher invested \$10,000, a building worth \$20,000, and supplies valued at \$5,000 in the business. May 4 Purchased \$15,000 of equipment, paying \$1,000 cash and signing a two-year, 10% note payable for the remainder. May 7 Rendered services to customers for \$3,000 cash and \$8,000 on credit. May 10 Used up \$1,000 worth of supplies. May 11 Paid salaries of employees \$2,000. May 25 Paid rent for May, \$900. May 30 Borrowed \$10,000 from the Third National Bank, signing a 90 day, 10% note. … read more
F. Naz
B.Com
CA Finalist & Completed B.com
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Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

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