Three accounting questions | Accounting homework help

Coyote Loco is a manufacturer of salsa. The follow historical collection pattern for its credit sales are as follows: 70% collected in month of sale 15% collected in first month after sale 10% collected in second month after sale 4% collected in third month after sale 1% uncollectible. The sales on account have been budgeted for the last seven months as: June – $122,500 July – 150,000 August – 175,000 Sept – 200,000 Oct – 225,000 Nov – 250,000 Dec – 212,500 1. Compute estimated cash collections during October from credit sales. 2. Compute the estimated total cash collections during the fourth quarter from sales made on account during the fourth quarter. 3. Construct an Excel spreadsheet to solve both of the preceding requirements. Show how the solution will change if the following information changes: sales in June and July were $100,000 and $130,000 respectively. 2… Sophisticates, Inc., a distributor of jewelry throughout California, is in the process of assembling a cash budget for the first quarter of 20×1. The following information has been extracted from the company’s accounting records: • All sales are on account. Sixty percent of customer accounts are collected in the month of sale; 35 percent are collected in the following month. Uncollectibles amounting to 5 percent of sales are anticipated, and management believes that only 20 percent of the accounts outstanding on December 31, 20×0, will be recovered and that the recovery will be in January 20×1. • Seventy percent of the merchandise purchases are paid for in the month of purchase; the remaining 30 percent are paid for in the month after acquisition. • The December 31, 20×0, balance sheet disclosed the following selected figures: cash, $60,000; accounts receivable, $165,000; and accounts payable, $66,000. • Sophisticates, Inc., maintains a $60,000 minimum cash balance at all times. Financing is available (and retired) in $1,000 multiples at an 8 percent interest rate, with borrowings taking place at the beginning of the month and repayments occurring at the end of the month. Interest is paid at the time of repaying principal and computed on the portion of principal repaid at that time. Additional data: JanuaryFebruary March Sales revenue …………………………………………$450,000 $540,000 $555,000 Merchandise purchases …………………………… 270,000300,000420,000 Cash operating costs ………………………………. 93,000 72,000 135,000 Proceeds from sale of equipment……………….. — — 15,000 Required: 1. Prepare a schedule that discloses the firm’s total cash collections for January through March. 2. Prepare a schedule that discloses the firm’s total cash disbursements for January through March. 3. Prepare a schedule that discloses the firm’s cash needs, if any, for January through March. The schedule should present the following information in the order cited: Beginning cash balance, total receipts (from requirement 1), total payments (from requirement 2), the cash excess (deficiency) before financing , borrowing needed to maintain minimum balance, loan principal repaid, loan interest paid, and ending cash balance. 3. Concord Farms produces items made from local farm products that are distributed to supermarkets. For many years, Concord’s products have had strong regional sales on the basis of brand recognition; however, other companies have begun marketing similar products in the area, and price competition has become increasingly important. Doug Gilbert, the company’s controller, is planning to implement a standard cost system for Concord and has gathered considerable information from his co-workers on production and material requirements for Concord’s products. Gilbert believes that the use of standard costing will allow Concord to improve cost control and make better pricing decisions. Concord’s cost popular product is strawberry jam. The jam is produced in 10-gallon batches, and each batch requires six quarts of good strawberries. The fresh strawberries are sorted by hand before entering the production process. Because of imperfections in the strawberries and normal spoilage, one quart of berries is discarded for every four quarts of acceptable berries. Three minutes is the standard direct-labor time for sorting required to obtain one quart of acceptable strawberries. The acceptable strawberries are then blended with the other ingredients. Blending requires 12 minutes of direct-labor time per batch. After blending, the jam is packaged in quart containers. Gilbert has gathered the following information from Joe Adams, Concord’s cost accountant. • Concord purchases strawberries at a cost of $1.60 per quart. All other ingredients cost a total of $0.90 per gallon. • Direct labor is paid at the rate of $18.00 per hour. • The total cost of material and labor required to package the jam is $0.76 per quart. Adams has a friend who owns a strawberry farm that has been losing money in recent years. Because of good crops, there has been an oversupply of strawberries, and prices have dropped to $1.00 per quart. Adams has arranged for Concord to purchase strawberries from his friend and hopes that $1.60 per quart will help his friend’s farm become profitable again. Required: 1. Develop the standard cost for the direct-cost components of a 10-gallon batch of strawberry jam. The standard cost should identify the following amounts for each direct-cost component of a batch of strawberry jam: (a) standard quantity, (b) standard price or rate, and (c) standard cost per batch. 2. Citing the specific ethical standards of competence, confidentiality, integrity, and credibility for management accountants (see “IMA Statement of Ethical Professional Practice” in Chapter 1), explain why Joe Adams’s behavior regarding the cost information provided to Doug Gilbert is unethical. 3. As part of the implementation of a standard-costing system at Concord Farms, Doug Gilbert plans to train those responsible for maintaining the standards in the use of variance analysis. Gilbert is particularly concerned with the causes of unfavorable variances. Discuss the possible causes of the following unfavorable variances and identify the individual(s) who should be held responsible: (a) direct-material purchase price variance and (b) direct-labor efficiency variance.