Task: Provide computations, Excel solutions, and step by step instructions for the following problems:
1. At the end of January, a parts firm had an inventory of 825 units, which cost $12 per unit to produce. During February, the company produced 750 units at a cost of $16 per unit. If the firm sold 1,050 units in February, what was its cost of goods sold?
a. Assume LIFO inventory accounting.
b. Assume FIFO inventory accounting.
2. A company has projected sales of $6,000 in September, $10,000 in October, $16,000 in November, and $12,000 in December. Of the company's sales, 20 percent are paid for by cash and 80 percent are sold on credit. Experience shows that 40 percent of accounts receivable are paid in the month after the sale, while the remaining 60 percent are paid two months after. Determine collections for November and December.
a. Also, assume the company's cash payments for November and December are $13,000 and $6,000 respectively. The beginning cash balance in November is $5,000, which is the desired minimum balance.
b. Prepare a cash budget with borrowing needed or repayments for November and December. (You will need to prepare a cash receipt schedule first).