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Sheet1 H.W. LR Lawn Treatment, Inc 1) For the case study LR Lawn Treatments, please complete the blank spaces on the LR Lawn Treatment spreadsheet. Please also calculate the following for 2009. Income...

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Sheet1
    H.W.        LR Lawn Treatment, Inc
                                        1)      For the case study LR Lawn Treatments, please complete the blank spaces on the LR Lawn Treatment spreadsheet. Please also calculate the following for 2009.
    Income Statement            2008    2009    % Inc
Decr    2009 Alt.
    Total Market (lawns professionally treated)            45,000    43,000        43,000            a)       Return on Assets: ______
    LR Lawns Treated (unit volume)            11,000    12,000                    b)      Cu
ent Ratio: _______
    Sales Revenue            $ 860,000    $ 885,000                    c)       Debt/Equity Ratio: _______
    Memo: Market Share                                    d)      Cash flow from Operations: _______
    Memo: Avg. Revenue/Lawn                                    e)       Cash flow from Investing Activities: ______
                                        f)       Cash Flow from Financing Activities: _______
    Less: Variable Cost of Sales Revenue                                    g)      Net Change in Cash for the year: _______
     Chemicals            $ 115,000    $ 125,000
     1099 Workers *            $ 175,000    $ 182,000                    2)      In a short essay (5-10 sentences), please compare the change in the financial results of the lawn business from 2008 to 2009.
     Truck Running Costs            $ 40,000    $ 40,000                        In your essay, please provide plausible second tier explanations for the changes. Consider selling prices, volumes, market shares, fixed costs and variable costs. Use your imagination.
    Total Cost of Sales Revenue            $ 330,000    $ 347,000                        For example, an increase in the market share might be due to a strong economy or a new housing development. Essay is worth 6 points and will be subjectively graded.
    = Gross Profit Margin            $ 530,000    $ 538,000
    Memo: Gross Profit Margin %
                                        3) The owner believes that if she would have had prices that were 5% lower in 2009, added another salaried salesperson (for $45,000) and increased advertising expenses to $60,000,
    Less: Overhead (Other Operating) Expenses:                                        the unit volume (lawns Treated) would have been 25% higher, and net income would have been higher in 2009.
    Salaried Employees            $ 190,000    $ 180,000                        Please complete the column XXXXXXXXXXalt) income statement and see if she is co
ect. Use logical business assumptions in making this forecast.
    Office and Warehouse rent            $ 90,000    $ 90,000                        Please also calculate the following based upon these new assumptions:
     Depreciation of Trucks            $ 30,000    $ 40,000
    Advertising            $ 30,000    $ 40,000                    a)       Market share: _________
     Total Overhead Expenses            $ 340,000    $ 350,000                    b)      Gross Margin %: ______
                                        c)       Profit Margin %: _______
    = EBIT (net operating income)            $ 190,000    $ 188,000
    less: Interest Expense             $ 23,000    $ 35,000        35,000
    = Pretax Income (profit)            $ 167,000    $ 153,000
    less: Income taxes            $ 40,000    $ 35,000
    = Net Income (profit)            $ 127,000    $ 118,000
    Memo: Profit Margin %
    Balance Sheet
    Cash            $ 5,000    $ 5,000
    Accounts Receivable            $ 25,000    $ 40,000
    Inventories            $ 8,000    $ 9,000
    = Cu
ent Assets            $ 38,000    $ 54,000
    Fixed Assets            $ 500,000    $ 550,000
    - Accumulated Depreciation            $ 80,000    $ 120,000
    = Net Fixed Assets            $ 420,000    $ 430,000
    Total Assets            $ 458,000    $ 484,000
    Accounts Payable            $ 8,000    $ 20,000
     Bank Loans            $ 275,000    $ 300,000
    = Total Liabilities            $ 283,000    $ 320,000
    Common Stock (Invested capital)            $ 100,000    $ 100,000
    Retained Earnings            $ 75,000    $ 64,000
    Total Liabilities and Owner's Equity            $ 458,000    $ 484,000
    * Workers are paid based upon the number of lawns treated (not hourly).
Sheet2
Sheet3

H.W.
Emily runs a vineyard that produces wine that has a recommended retail sales price of $9.00. Her selling price to the retailer is $6.50
ottle and her variable costs of goods sold are $3.10
ottle. She has operating costs (overhead) of $140,000 per month and she sells, on average, 60,000 bottles per month. Calculate for an average month: please show your calculations.
a) Retail margin %: XXXXXXXXXX______
) Emily’s Gross margin %: _______
c) Breakeven point: __________
d) Operating Income: XXXXXXXXXX_______
e) Operating Income: XXXXXXXXXX_______ (if sales volume increases by 10%)
f) Operating Income: XXXXXXXXXX_______ (if selling price is increases by 10%)
Answered Same DayNov 30, 2021

Solution

Bharathi answered on Dec 05 2021
54 Votes
Sheet1
    H.W.        LR Lawn Treatment, Inc
                                1)      For the case study LR Lawn Treatments, please complete the blank spaces on the LR Lawn Treatment spreadsheet. Please also calculate the following for 2009.
    Income Statement            2008    2009    % Inc
Decr    2009 Alt.
    Total Market (lawns professionally treated)            45,000    43,000        43,000    a)       Return on Assets: $118000
    LR Lawns Treated (unit volume)            11,000    12,000        15,000    b)      Cu
ent Ratio: 2.7:1 (54000/20000) ( Here I have not considered bank loans as Cu
net liability as only Bank OD or CC considered under cu
ent liability. Here there are not much amount of accounts receivable no point of OD will arise)
    Sales Revenue            $ 860,000    $ 885,000        1,114,065    c)       Debt/Equity Ratio: 1.83:1 (300000/164000)
    Memo: Market Share                            d)      Cash flow from Operations: $153000(127000+30000-49000+33000-8000+20000)
    Memo: Avg. Revenue/Lawn                            e)       Cash flow from Investing Activities: -$50000
                                f)       Cash Flow from Financing Activities: (-118000-75000+64000)+(300000-275000)
    Less: Variable Cost of Sales Revenue                            g)      Net Change in Cash for the year: Nil
     Chemicals            $ 115,000    $ 125,000        156,300
     1099 Workers *            $ 175,000    $ 182,000        227,500    2)      In a short essay...
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