Ocin Corporation

Step 1: Estimate Sales

Table 1: Assumed Projected Sales of DVD and Blue Players (first 6 months of 2020)
DVD Blue Ray Total
Estimated Sales Volume(units) 300 600
Estimated sales price/unit ₱2,000 ₱3,000
Sales revenue ₱600,000 ₱1,800,000 ₱2,400,000
Step 2: Estimate Number of Units to be Produced and the Gross Profit

Table 2: Assumed Stock of Beginning Inventory

DVD Blue Ray Total
Beginning Inventory (units) 26 54
Cost per unit ₱1,067 ₱1,714
Total costs ₱27,742 ₱92,556
Desired Ending Inventory (10% of
estimated sales volume - see Table 1) 30 60
(units)

Table 3: Computation of Estimated Number of Units to Produce

DVD Blue Ray
Estimated Sales Volume (units) 300 600
Desired Ending Inventory (units) 30 60
Less: Beginning Inventory (units) 26 54
Estimated Units to be Produced (units) 304 606
Table 4: Assumed Cost per unit
DVD Blue Ray
Raw materials cost/unit ₱567 ₱629
Direct Labor cost/unit 867 1,214
Overhead cost/unit 200 243
Total product cost/unit ₱1,634 ₱2,086

Table 5: Computation of Estimated Production Costs

DVD Blue Ray
Total product cost/unit ₱1,634 ₱2,086
Multiplied by estimated units to be produced (units) 304 606
Total Production Costs ₱496,736 ₱1,264,116
Total

₱1,760,852
Table 6: Computation of Cost of Good Sold and Gross Profit
DVD Blue Ray
Sales revenue ₱600,000 ₱1,800,000
Less: Cost of Goods Sold:
27,742 92,556
Beginning Inventory (see Table 2)
Add: Production (see Table 5) 496,736 1,264,116
Total goods available for sale 524,478 1,356,672
Ending Inventory
DVD 30 units @ Php1634 (see Table
49,020
3 and Table 5)
Blue Ray 60 units @ Php2086(see
125,160
Table 3 and Table 5)
Cost of goods sold 475,458 1,231,512
Gross Profit 124,542 568,488

Table 7: Computation of the Cost of Ending Inventory

Beginning Inventory (Table2) ₱120,298
Production costs (Table 5) ₱1,760,852
Total goods available for sale 1,881,150
Less: Cost of Goods Sold 1,706,970
Ending Inventory ₱174,180
 Total
₱2,400,000
120,298
1,760,852
1,881,150

49,020

125,160
1,706,970
693,030
 Table 8
Ocin Corporation
Pro-Formula Income Statement
For yhe 6-month Period Ended June 30,2020

Sales
Less: Cost of Goods Sold
Gross Profit
Less: Selling and Administrative Expenses (assumed figures
Net Income before finance charges
Less: Interest Expense (assumed figure)
Net Income before taxes
Less: Income tax (35%)
Net income after tax
Cash Dividends (assumed)
Increase in Retained Earnings
₱2,400,000
1,706,970
₱693,030
350,000
343,030.00
12,000
331,030.00
115,860.50
₱215,169
15,000
₱200,169
Step 4: Prepare the Cash Budget

Estimated January February March

Sales 360,000 240,000 360,000

Table 9: Summary of Monthly Cash Receipts

December January February March
Sales ₱288,000 ₱360,000 ₱240,000
Collections:
20% of current sales 72,000 48,000
80% of previous month's sales 230,400 288,000
Total ₱302,400 ₱336,000 ₱264,000
April May June
600,000 360,000 480,000

April May June -

₱360,000 ₱600,000 ₱360,000 ₱480,000

72,000 120,000 72,000 96,000

192,000 288,000 480,000 288,000
₱408,000 ₱552,000 ₱384,000
Table 10: Computation of the Composition of Production Costs
DVD Player Blue Ray Players
Units Unit costs Total costs Units Unit cost Total costs
Material 304 ₱567 ₱172,368 606 ₱629
Labor 304 867 263,568 606 1,214
Overhead 304 200 60,800 606 243
Combined Costs
₱381,174 ₱553,542
735,684 999,252.00
147,258 208,058.00
₱1,760,852
Table 11: Computation of the Average Monthly Production Costs
Total Costs A Time Frame B (months)
Materials ₱553,542 6
Labor 999,252 6
Overhead 208,058 6
uction Costs
Average Monthly Costs C=A/B
₱92,257
166,542
34,676
Table 12: Summary of the Monthly Cash Payments (in Php)
December January February March
Monthly RM purchases (Table
75,500 92,257 92,257 92,257
11)
Pay't for material 75,500 92,257 92,257
Labor (Table11) 166,542 166,542 166,542
Overhead (Table11) 34,676 34,676 34,676
Selling and Administrative
58,333 58,333 58,333
Expenses (Table8)
Interest Expense (Table8) 2,000 2,000 2,000
Income tax (Table8) 57,930
Cash Dividends (Table8)
New Equipment acquisition 5,000
Total 337,051 353,808 411,738
 April May June
92,257 92,257 92,257
92,257 92,257 92,257
166,542 166,542 166,542
34,676 34,676 34,676
58,333 58,333 58,333
2,000 2,000 2,000
57,930
15,000
8,000
353,808 353,808 434,738
Table 13: Monthly Cash Flow
January February March April
Total Receipts (Table 9) ₱302,400 ₱336,000 ₱264,000 ₱408,000
Total Payments (Table12) 337,050.67 353,807.67 411,737.92 353,807.67
Net Cash Flow ₱34,651 ₱22,808 ₱147,738 ₱54,192
May June
₱552,000 ₱384,000
353,807.67 434,737.92
₱198,192 ₱50,738
Table14: Cash Budget (Including borrowing and repayment)
January February March April May
Net Cash Flow ₱34,651 ₱22,808 ₱147,738 ₱54,192 ₱198,192
Beginning cash balance 200,000 200,000 200,000 200,000 200,000
Cumulative Cash balance 165,349 177,192 52,262 254,193 398,193
Monthly loan (repayment) 34,651 22,808 147,738 -54,192 -151,005
Cumulative loan balance 34,651 57,459 205,197 151,005 0
Ending Cash balance ₱200,000 ₱200,000 ₱200,000 ₱200,000 ₱247,187
June
₱50,738
247,540
196,802
3,198
3,198
₱200,000
PRO-FORMA STATEMENT OF FINANCIAL POSITION

Ocin Corporation
Statement of Financial Position
December 31, 2019

Current Assets:
Cash and Cash Equivalents ₱200,000
Trade Securities 128,000
Trade & Other Receivables 230,400
Inventory (Table 2) 120,298
Total Current Assets 678,698
Noncurent Assets
Property, Plant, and Equipment 827,680
Total Assets ₱1,506,378
Liabilities and Shareholders' Equity
Accounts Payable ₱75,500
Notes Payable 0
Loan Payable- long-term 447,440
Ordinary Shares 316,340
Retained Earnings 667,098
Total Liabilities & Shareholders' Equity ₱1,506,378

Ocin Corporation
Statement of Financial Position
June 30, 2020

Current Assets:
Cash and Cash Equivalents(Table14) ₱200,000
Trade Securities(assumed) 127,000
Trade & Other Receivables(480,000x80%) 384,000
Inventory (Table 7) 174,180
Total Current Assets ₱885,180
Noncurent Assets
Property, Plant, and Equipment 840,680
Total Assets ₱1,725,860
Liabilities and Shareholders' Equity
Accounts Payable (Table12) ₱92,257
Notes Payable (Table 14) 3,198
Loan Payable- long-term (assumed) 447,440
Ordinary Shares (assumed) 316,340
Retained Earnings 866,625
Total Liabilities & Shareholders' Equity ₱1,725,860
cial Position

cial Position
Percentage-Of-Sales Method

Statement of Financial
& Corresponding Pecenta
(in Thousand Pesos for

Cash and Cash Equivalents

Trade and other Receivables
Merchandise Inventory
Property, Plant, and Equipment
Total Assets
Trade and Other Payables
Accrued Payable
Loans Payable
Ordinary Shares
Retained Earnings
Total Liabilities & Shareholders' Equity
 Gillian Corporation
Statement of Financial Position
& Corresponding Pecentage of Sales
(in Thousand Pesos for the Value)

Percent of Sales
Value
Php 750,000
₱15,000 2% 750,000
120,000 16%
75,000 10%
150,000 20%
₱360,000 48%
120,000 16%
30,000 4%
45,000 6%
30,000 4%
135,000 18%
₱360,000 48%