Klandon Company
Balance Sheet
as of March 31, 2015
Cash $ 40,000
Accounts Receivable (net) 30,000
Finished Goods Inventory 26,000
Raw Materials Inventory 5,200
Property, Plant & Equipment 200,000
Accumulated Depreciation (50,000)
Total Assets $ 251,200
Cash % 0%
Month of sale 70%
Month after sale 25%
Uncollectible 5%
Inventory
Direct Labor
Variable
Fixed Overhead Overhead per
per month unit
Depreciation 8,000
Indirect Materials 1,000 $ 0.05
Indirect Labor 10,000 $ 0.20
Utilities 20,000 $ 0.10
Property Taxes 5,000 $ -
Maintenance 6,000 $ 0.15
Financing Parameters
Raw Materials
Finished Goods
Unit cost
Direct materials $ 2.00
Direct labor $ 2.50
Overhead $ 1.99
Total standard unit cost $ 6.49
Ending inventory units 5,000
Ending finished goods inventory $ 32,426
Less disbursements:
Material purchases 40,000 72,300 72,700 185,000
Direct labor 65,000 115,000 72,500 252,500
Manufacturing overhead 55,000 65,000 56,500 176,500
Selling & administrative expenses 46,500 61,500 51,500 159,500
Income taxes 50,000 - - 50,000
Equipment (sales) purchases - - 48,000 48,000
Dividends Charles Davis: 49,000 - - 49,000
Total Cash Disbursements
you have to 305,500 313,800 301,200 920,500
borrow in even Charles Davis:
increments of repayment have to be
Cash excess (deficiency) (95,500) 116,700 64,240 24,500
$1,000, so you in increments of
Minimum Cash Balance 30,000 30,000 30,000 30,000 $1,000, so you have to
need 126,000.
Cash excess (needed) (125,500) 86,700 34,240 (5,500) go with $84,000
Short-Term Financing:
Borrowing 126,000 - - 126,000
Repayments 85,000 33,000 118,000 Charles Davis:
Interest 1,260 410 1,670 Sum across the row for
these three rows.
Total Short-Term Financing 126,000 86,260 33,410 245,670
Quarter End
Sales $ 1,000,000
Cost of goods sold 648,574
Gross profit 351,426
Selling & administrative expense 240,300
Operating income 111,126
Interest expense 1,670
Income before taxes 109,456
Income tax expense 32,837 $ (2,387)
Net income $ 76,619 $ (5,362)
$ (35)
Klandon Company
Pro-forma Balance Sheet
Quarter End
Cash $ 30,830
Accounts receivable 75,000
Finished goods inventory 32,426
Raw materials inventory 4,600
Property, plant & equipment 248,000
Accumulated depreciation (104,800)
Total Assets $ 286,056