Management Finance & Decision Making

    There are two (2) questions.
    Question 1: Show all workings. Could be done in word or excel format.
    Question 2: Answer should be in word document format.
    QUESTION 1
    Bill Thomas Bates & Hills controller has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The companys balance sheet as of December 31 is as follows:
    Cash.. $ 36000
    Accounts Receivable (net) 35100
    Finished Goods Inventory 29400
    Raw Materials Inventory 4536
    Property Plant & Equipment 180000
    Accumulated Depreciation (45000)
    Total Assets $240036
    Accounts Payable .. $10800
    Income Tax Payable .. 45156
    Common Stock .. 60000
    Retained Earnings . 124080
    Total Liabilities & Owners Equity $240036
    Additional Information:
    The company expects a 18% income tax rate and all quarterly taxes are paid in the first month of the following quarter.
    The company expects a 30% income tax rate and all quarterly taxes are paid in the first month of the following quarter.
    Required
    a. Prepare Bates & Hills pro-forma income statement for the first quarter.
    b. Prepare Bates & Hills pro-forma balance sheet as of March 31.
    ….
    QUESTION 2
    Complete essay in Word document in APA format.
    Essay Question 1
    Complete the essay questions in one Word document and submit to the Dropbox:
    Management by exception focuses only on those variances management considers important. List three factors that managers use in deciding whether or not to investigate a variance and give an example of each.
    Essay Question 2
    Managers use budgeting to control and evaluate their operations. Two types of budgets that werediscussed: the static budget and the flexible budget. How do the two budgets differ and explain how the flexible budget is used in evaluating performance.

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