BMAL 530
Excel Project Assignment Instructions
Overview
Assume ABC Company has asked you to not only prepare their 2017 year-end Balance Sheet but to also provide pro-forma financial statements for 2018. In addition, they have asked you to evaluate their company based on the pro-forma statements with regard to ratios. They also want you to evaluate 3 projects they are considering. Their information is as follows:
End of the year information:
Account
12/31/17
Ending Balance
Cash
50,000
Accounts Receivable
175,000
Inventory
126,000
Equipment
480,000
Accumulated Depreciation
90,000
Accounts Payable
156,000
Short-term Notes Payable
12,000
Long-term Notes Payable
200,000
Common Stock
235,000
Retained Earnings
solve
Additional Information:
· Sales for December total 10,000 units. Each month’s sales are expected to exceed the prior month’s results by 5%. The product’s selling price is $25 per unit.
· Company policy calls for a given month’s ending inventory to equal 80% of the next month’s expected unit sales. The December XXXXXXXXXXinventory is 8,400 units, which complies with the policy. The purchase price is $15 per unit.
· Sales representatives’ commissions are 12.5% of sales and are paid in the month of the sales. The sales manager’s monthly salary will be $3,500 in January and $4,000 per month thereafter.
· Monthly general and administrative expenses include $8,000 administrative salaries, $5,000 depreciation, and 0.9% monthly interest on the long-term note payable.
· The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of sale).
· All merchandise purchases are on credit, and no payables arise from any other transactions. One month’s purchases are fully paid in the next month.
· The minimum ending cash balance for all months is $50,000. If necessary, the company bo
ows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.
· Dividends of $100,000 are to be declared and paid in Fe
uary.
· No cash payments for income taxes are to be made during the first calendar quarter. Income taxes will be assessed at 35% in the quarter.
· Equipment purchases of $55,000 are scheduled for March.
ABC Company’s management is also considering 3 new projects consisting of the purchase of new equipment. The company has limited resources, and may not be able to complete make all 3 purchases. The information is as follows for the purchases below:
Project 1
Project 2
Project 3
Purchase Price
$80,000
$175,000
$22,700
Required Rate of Return
6%
8%
12%
Time Period
3 years
5 years
2 years
Cash Flows – Year 1
$48,000
$85,000
$13,000
Cash Flows – Year 2
$36,000
$74,000
$13,000
Cash Flows – Year 3
$22,000
$38,000
N/A
Cash Flows – Year 4
N/A
$26,800
N/A
Cash Flows – Year 5
N/A
$19,000
N/A
Instructions
Part A:
· Prepare the year-end balance sheet for 2017. Be sure to use proper headings.
· Prepare budgets such that the pro-forma financial statements for the first quarter of 2018 may be prepared.
· Sales budget, including budgeted sales for April.
· Purchases budget, the budgeted cost of goods sold for each month and quarter, and the cost of the March 31 budgeted inventory.
· Selling expense budget.
· General and administrative expense budget.
· Expected cash receipts from customers and the expected March 31 balance of accounts receivable.
· Expected cash payments for purchases and the expected March 31 balance of accounts payable.
· Cash budget.
· Budgeted income statement.
· Budgeted statement of retained earnings.
· Budgeted balance sheet.
Part B:
· Calculate using Excel formulas, the NPV of each of the 3 projects.
· It is possible that ABC Company may not be able to complete all 3 projects. Therefore, advise ABC Company as to the order in which they should pursue the projects (i.e., which project should ABC Company attempt to do first, second, and last).
· Provide justification and analysis as to why you chose the order you did. The analysis must also be done in Excel, not in a separate document.
This assignment must be submitted as one Excel document.
Note: Your assignment will be checked for originality via the Turnitin plagiarism tool.
Page 3 of 3
Criteria Ratings Points
Required
Budgets
70 to >63.0 pts
Advanced
Required budgets are
presented in Excel, are
accurate, and are done
with appropriate formulas.
63 to >58.0 pts
Proficient
Required budgets are
presented in Excel, are
mostly accurate, and are
done with appropriate
formulas.
58 to >0.0 pts
Developing
Required budgets are
presented in Excel;
however, most are
inaccurate and are not done
with appropriate formulas.
0 pts
Not
Present
70 pts
Budgeted
Financial
Statements
10 to >9.0 pts
Advanced
Budgeted financial
statements are presented
in Excel, are accurate, and
are done with appropriate
formulas.
9 to >7.0 pts
Proficient
Budgeted financial
statements are
presented in Excel, are
mostly accurate, and are
done with appropriate
formulas.
7 to >0.0 pts
Developing
Budgeted financial
statements are presented in
Excel; however, most are
inaccurate, and are not
done with appropriate
formulas.
0 pts
Not
Present
10 pts
NPV
Calculations
45 to >40.0 pts
Advanced
NPV calculations fo
projects are done in Excel,
are accurate, and are done
with appropriate formulas.
40 to >37.0 pts
Proficient
NPV calculations fo
projects are done in
Excel, are mostly
accurate, and are done
with appropriate
formulas.
37 to >0.0 pts
Developing
NPV calculations fo
projects are done in Excel;
however, most are
inaccurate and not complete
with appropriate formulas.
0 pts
Not
Present
45 pts
Analysis of
Questions
25 to >22.0 pts
Advanced
Thoughtful analysis of
questions posed
(considering assumptions,
analyzing implications,
comparing/contrasting
concepts).
22 to >20.0 pts
Proficient
Analysis of questions
posed (considering
assumptions, analyzing
implications,
comparing/contrasting
concepts).
20 to >0.0 pts
Developing
Shallow analysis of
questions posed
(considering assumptions,
analyzing implications,
comparing/contrasting
concepts).
0 pts
Not
Present
25 pts
Headings
and
Calculations
30 to >27.0 pts
Advanced
Balance sheet for 2013 is
prepared using prope
headings and calculations
in Excel.
27 to >24.0 pts
Proficient
Balance sheet for 2013
is prepared not using
proper headings and
calculations in Excel.
24 to >0.0 pts
Developing
Balance sheet for 2013 is
prepared not using
headings and calculations in
Excel.
0 pts
Not
Present
30 pts
Total Points: 180
Excel Project Grading Ru
ic | BMAL530_B05_202140