Acc 206 Principles Of Accounting Ii

1490 words - 6 pages

ABC Company
ACC 206 Principles of Accounting II

The ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles, introducing the new project to build cedar dollhouses by shingle scrap materials for reaching $3 million annual sales within the next 3 years. Explain the overall risk profile of the ABC Company based on current economic and industry issues. In order to help out the CEO I prepare reports that will contain the information regarding the project. These statements refer to the accompanying Excel spreadsheet as well as word documents. The statements are; Cash Flow statements, Product Cost, Net present value, Depreciation, ...view middle of the document...

Large amounts of data are collected from literally every aspect of the company (as well as industry standards) and are dissected and organized into reports which present top management with the information it needs to make important future financial decisions. Although sometimes overlooked as an “important” role in a company, the information it brings is vital to its success.
Collecting data and reporting are two significant aspects of managerial accounting. There are many different sources of data which are used to present important information to various departments throughout the company. Below is a detailed explanation of which data are collected, from which departments they are collected, and how they are used in the company:
Sales Department
In order to interpret information vital to the sales department of a company, managerial accountants must collect the following information:
Price of products sold Product mix
Fixed and variable costs Industry standards
Historical sales dollars Activity levels
Profit and loss Future (desired) sales levels
This information is used and organized into a variety of beneficial reports. For example, the breakeven point, or the amount of products sold where the sales profit is zero, can be determined by a calculation which uses variable expenses, fixed expenses, and sales dollars to find the level of sales units that results in $0 profit. This equation can help sales management determine where changes can be made in order to find the lowest levels of production which still produce a profit for the company.
Another benefit to the sales department that managerial accounting can provide is the sales budget.
Budgeted Balance Sheet
July 31, 2012
Current assets:
Accounts receivable 3,640
Inventory 15,700
Total current assets $26,440
Plant assets:
Furniture and fixtures $34,500
Accumulated depreciation (30,730) 3,770
Total assets $30,210
Current liabilities:
Consider the following June actual ending balances and July 31, 2012, budgeted amounts
a. June 30 inventory balance, $17,750
b. July payments for inventory, $4,300
c. July payments of accounts payable and accrued liabilities, $8,200
d. June 30 accounts payable balance, $10,600
e. June 30 furniture and fixtures balance, $34,500; accumulated depreciation balance, $29,830
f. June 30 equity, $28,360
g. July depreciation expense, $900
h. Cost of goods sold, 50% of sales
i. Other July expenses, including income tax, total $6,000, paid in cash
j. June 30 cash balance, $11,400
k. July budgeted credit sales, $12,700
l. June 30 accounts receivable balance, $5,140
m. July cash receipts, $14,200
1. Prepare a budgeted balance sheet.
Budgeted Balance Sheet
July 31, 2012
Current assets:
Accounts receivable 3,640
Cash $7,100
 Inventory 15,700
 Total current assets $26,440

Plant assets:
Furniture and fixtures 34,500
Accumulated depreciation -29830
Depreciation Expense -900

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