Hampton Machine Tool

When Cartwright Lumber Company was originally founded, it was owned by both Mark Cartwright and Henry Stark. However, Cartwright bought out Stark’s interest for $105,000 and became sole owner of the company. To finance this payment, Henry took out a $70,000 loan with an interest rate of 11% secured by land and buildings payable over 10 years at a rate of $7,000 each year.

1. Using the historical data as a guide, construct a pro forma (forecasted) profit and loss statement

A/ Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase, for which the loan was initially requested, was a major cash disbursement of $3 million. In the period between November 1978 and August 1979, stock repurchase represented 58% of total expenditures for that period, while inventory purchases represented 42% of total expenditures.

Case 4: As of January 1, the Lohse Company owes the First Arbor Bank $350,000 which is due on December 31. Since Lohse seems unable to repay the note, the bank agreed that Lohse can “settle” this balance by agreeing to make four, annual installments on each of the next four years, provided that it adds a “due on

The cash budget is another aspect of budget expectation. The cash budget determines how much cash an organization have on hand, and how much is needed to meet each expense. The cash budget will reveal to companies the availability of any type of surplus the company has for short-term investments.

A/ Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase, for which the loan was initially requested, was a major cash disbursement of $3 million. In the period between November 1978 and August 1979, stock repurchase represented 58% of total expenditures for that period, while inventory purchases represented 42% of total expenditures.

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Keycorp loaned Planned Pethood, a veterinary facility, $389,000 at an altered financing cost for a term of 10 years. The loan was secured by real property possessed by Planned Pethood. Prepayment of the loan was allowed with the payment of a prepayment premium, in a sum indicated in the promissory note. Arranged Pethood chose to prepay the loan eight years and eight months early and paid Keybank a prepayment premium of around $40,000. The prepayment premium was figured in light of an equation utilizing the remarkable chief parity and the term staying on the loan. Arranged Pethood recorded suit, affirming that the prepayment premium added up to an unenforceable liquidated harms statement and that the measure of the prepayment premium was

A weakness is made by the way that John require just present a rundown of records and adds up to be charged to renew the unimportant money store. The supporting documentation for the frivolous money payment additionally ought to be submitted with John's rundown and looked into by another person. Astonishment numbers of the store additionally ought to be made to guarantee that the trust is being kept up on an imprest premise, that is, to guarantee that money and/or Receipts Square with $200 at all times.

The reason why Butler Lumber Co. is considering finding a different line of credit is because they’ve nearly exhausted all their usable credit with Suburban National Bank, using up $247,000 of the $250,000 of the credit limit. To compile this issue, the bank is wishing to secure the loan with some of Butler’s property. Considering the company’s large debt ratios, they have decided to check with Northrop National Bank’s offer to extend their line of credit by $215,000.

The testimony of Al Rogers, carbureted in large part by the memorandum prepared by Tray Corn dated _, 2009, provides an alternative economic explanation for the determination that a loan would be made to the husband and wife personally rather than an additional loan being made to the Cfab(?).

6. A pro forma income statement analysis that includes a forecast of revenue for the coming year, major cost and expense categories, earnings, earnings per share, and dividends. Rely on your own forecast. Do not base your analysis on a sales or earnings forecast from a secondary source such as Value Line.

The pro forma statements of cash-flows are projected statements of cash flows. Cash receipts are classified as operating, investing, or financing activities. In direct presentation it reports the major classes of gross cash, operating receipts, and payments and the difference between them. Indirect presentation reconciles net income with the net operating cash-flows which requires balance sheet data such as accounts receivable, accounts payable, inventory, and net income.

Numerous business transactions have effects on different time periods. For instance, suppose Citigroup purchases a new building or Delta Air Lines purchases a new airplane; these assets are going to be used for several years. It is argued that the full cost of such items should not be expensed at the purchasing period as such items are going to be used for several subsequent years. Thus it is important to determine the effects of such transaction on particular accounting periods. However, determination of revenues amounts and expenses amounts and reporting them in any given accounting period is rather difficult (Bamber and Parry, 2014). Reporting properly demands

I have included the firm's original income statement and balance sheet without the purchase and then with the machine purchase. I have assumed that the firm would use the $218,000 to reduce the bank loans balance for each year. This reduction of the bank loan balance will lower their three restrictive financial ratios.