Rosey’s Roses
Present and Future Values
Future need: 15,000.00$ Future need: 15,000.00$
Term (in years): 4 Term (in years): 4
Interest rate: 2% Interest rate: 2%
Annuity payment required: ($3,639.36) Invest now: ($13,857.68)
Year Interest Annuity Investment Year Interest Investment
0 $0.00 0 $13,857.68
1 $0.00 $3,639.36 $3,639.36 1 $277.15 $14,134.84
Year Interest Annuity Investment Year Interest Investment
0 –$ 0 $4,000.00
1 $1,000.00 1,000.00$ 1 $80.00 $4,080.00
2 $20.00 $1,000.00 2,020.00$ 2 $81.60 $4,161.60
3 $40.40 $1,000.00 3,060.40$ 3 $83.23 $4,244.83
4 $61.21 $1,000.00 4,121.61$ 4 $84.90 $4,329.73
2 $72.79 $3,639.36 $7,351.50 2 $282.70 $14,417.53
3 $147.03 $3,639.36 $11,137.89 3 $288.35 $14,705.88
4 $222.76 $3,639.36 $15,000.00 4 $294.12 $15,000.00
Annuity investment: ($1,000.00) Current investment: ($4,000.00)
Term (in years): 4 Term (in years): 4
Interest rate: 2% Interest rate: 2%
Future value: $4,121.61 Future value: $4,329.73
Rosey’s Roses Month Miles Driven Delivery Expense
Predicting Costs Jan-16 5,400 12,000$
Feb-16 5,700 12,100$
Mar-16 6,300 12,600$
Apr-16 4,200 10,100$
May-16 7,500 13,750$
Jun-16 3,500 10,000$
Jul-16 8,000 18,000$
High Expense 13,000 24,000$
Low Expense 3,500 10,000$
Difference 9,500 14,000$
Hi-Lo Method
Variable cost/unit sold 1.47$
Fixed cost 4,842.11$
Sep-16 5,100 11,000$
Feb-17 8,800 15,700$
Mar-17 7,500 14,500$
Apr-17 6,900 12,950$
May-17 7,900 18,000$
Jun-17 7,200 13,500$
Jul-17 9,500 18,000$
Delivery expense when 12,000 miles driven= 22,526$
Least Squares / Regression Method
Variable cost/unit sold 1.60$
Fixed cost 2,999.04$
Delivery expense when 12,000 hours = 22,228$
$20,000
$22,000
$24,000
D
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i
Delivery Expense/Miles Driven
Rosey’s Roses
Allowance for Uncollectible Accounts
Aging Method Information Current
0 – 30 Days Past
Due
31 – 60 Days
Past Due
61 – 90 Days
Past Due
> 90 Days
Past Due
Total
Past experience ratio for % of sales method 1.00%
Facts:
Accounts receivable balance (beg) 37,000
Sales on account 345,000
Collections on account (337,000)
Write-offs of accounts receivable (3,700)
Accounts receivable balance (end) 41,300
Percentage of Sales Method
Allowance for uncollectible accounts (beg) 1,200
Write-offs of accounts receivable (3,700)
Uncollectible accounts expense 3,450
Allowance for Uncollectible accounts (end) 950
Aging Method
Allowance for uncollectible accounts (beg) 1,200
Write-offs of accounts receivable (3,700)
Uncollectible accounts expense 4,250
Allowance for uncollectible accounts (end) 1,750
Past experience ratio 3.00% 5.00% 15.00% 20.00% 40.00%