Fun Games Company

Fun Games Company

Length: 1322 words (3.8 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
Fun Games Company

Fun Games Company was founded by Avery Rinehart to produce a novelty item marketed under the name Puzzler. Each Puzzler cost the company $14 to produce. In addition to these production costs that varied in direct proportion to volume (so-called variable costs), the company also incurred $4,000 monthly ¡°being in business costs (so-called fixed costs) irrespective of the month's volume. The company sold its product for $22 each.
As of December 31, Rinehart had been producing Puzzler for three months using rented facilities. The balance sheet on that date was as follows:

Balance Sheet
As of December 31

Assets
Cash $ 58,500
Accounts receivable 27,500
Inventory 14,000
$100,000

How to Cite this Page

MLA Citation:
"Fun Games Company." 123HelpMe.com. 20 Apr 2019
    <https://www.123helpme.com/view.asp?id=165140>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

History of Video Games Essay

- Did you know that Pong; the first game made by Atari, wasn’t originally meant to be released to the public. A new Atari employee was given the assignment of making it simply as a test of his game design skills. Since Pong became a hit, video games have been a large part of the entertainment business. They have found their way into homes all over the world. “You can’t say that video games grew out of pinball, but you can assume that video games wouldn’t have happened without it. It’s like bicycles and cars....   [tags: Video Games]

Research Papers
2092 words (6 pages)

The Development of Video Games Essay

- In society’s current era of technological advancement, video games have gone a long way since they were first created. Video games in the twenty-first century are no longer just toys or junk in the lifestyles of the youth. They have become innovative inventions that not only entertain its users, but also help aid the people in both the academic field and in jobs. The influences that video games bring about in the culture of the youth today are, in fact, not the negative influences that most people think....   [tags: Technology, Arcade Games]

Research Papers
2834 words (8.1 pages)

Video Games and Society Essay

- Video Games and Society Are video games really meant to be for society. Are they really as corruptive as most studies make them out to be. There is without doubt video games have made an impact on society. According to ProCon.org, “97% of 12-17 year olds in the US played videogames” (“Video Games”). You could ask nearly any teenager of the streets if they have played a video game, and their answer will most likely be yes. But is this a bad thing. Video games can help society in many different ways, more entertainment for all people and creating new inventions....   [tags: ipad games, learning, society]

Research Papers
1088 words (3.1 pages)

Essay on Video Games as a Learning Tool

- There are several negative stereotypes associated with video games and those who play them; some of these may often hold true. However, there are plenty of learning opportunities in video games. While the direct purpose of some games is to educate or train, other games that do not directly have this purpose can still become a learning experience for the player. As Ntiedo Etuk, president of the educational video game company Tabula Digital said, “The traditional view of video games has been that they are distractions from the task of learning” (Electronic Education Report 1)....   [tags: computer based games, electronic education]

Research Papers
1461 words (4.2 pages)

The Independent Games Movement Essay

- For any fan of video games today, they may have realized a certain breed of game that has risen to prevalence over the years after a large period of time languishing in the “underground” of conventional games development. These games have become more prominent due to the fan bases which support them, and also due to the constant attention from mainstream gaming media and larger gaming companies. These are independent games - games that are created without the boon of a publisher’s funding. Usually crafted by smaller teams of designers, artists and programmers, the independent gaming movement is looked upon as the “punk era of gaming culture” (as explained by indie developer, Rami Ismail)....   [tags: Video Games, Gaming Industry, Game Developer]

Research Papers
1272 words (3.6 pages)

Video Games - The Forgotten Art Essay

- Video Games - The Forgotten Art Ask any major in the fine arts for the definition of art. They're likely to tell you that it is self-expression through the use of some sort of medium. Most commonly thought of are clay for a sculpture, paint for a masterpiece, even music notes for a four-movement suite. The last thing you'd think of is a computer program for a video game. But why not. Don't video games incorporate both artwork and music. Each one is considered art, but many people consider the result, when put together, to be a waste of time....   [tags: Argument Paper Video Games Art]

Research Papers
1842 words (5.3 pages)

Video Games Essay

- Video Games BANG. You fire another round into the horde of zombies’ lurching toward you, and reach for another clip. Then you realize that you’re out of ammo, and there’s still loads of rotting corpses walking right at you. You take out your handy combat knife and prepare for a fight. Of course, you’re not actually being attacked by zombies; you’re playing a video game. Video games are the world’s fastest growing industry, with a net worth of more than 30 billion dollars (“zdnet.com”). They are played by millions worldwide and have become a large part of contemporary society’s culture....   [tags: Games Gaming]

Free Essays
925 words (2.6 pages)

Physics and Computer Games Essay

- Computer games have steadily become a form of mainstream entertainment ever since Pong was released back in 1958. Today, it is hard to find an electronics department in any store that doesn't carry some sort of computer game. "Big deal," you say, "Everyone knows about computer games. What does they have to do with physics?" Well, the technology for creating more powerful software is constantly advancing, and since games are a form of software, they too become more and more advanced. As games become more advanced, game developers aim to create games that offer a more realistic experience....   [tags: Physics Computers Science Video Games]

Free Essays
1005 words (2.9 pages)

Persuasive Speech : Video Games

- When I was younger, I was always told video games were a “waste of my time,” a “distraction from responsibilities,” or even a “useless fad”. However as I’ve gone through my life as a high school student and now an undergraduate student at San Jose State University, I’ve noticed one thing- video games are here to stay. That being said, I’ve realized that some of the games the community has been playing have not only been directly connected to one’s critical thinking skills, but also have made the player use his/her mind to try new creative ways to achieve their in-game goals....   [tags: Education, High school, Middle school, School]

Research Papers
970 words (2.8 pages)

Video Games Essay

- Video Games I. The Video or Computer Game Industry The now multi-billion dollar video game industry starting slowly. In 1972, Atari developed Pong, a simple tennis-like game played on the television screen. Pongwas followed by Space Invadersin 1978 (Griffiths 223). Since then, thousands of games are available over the Internet, on CDROM for personal computers, hand-held units, and television console units like Playstation, Nintento, and Sega. Further, the market has developed beyond just entertainment, now providing educational games that make learning fun....   [tags: Technology Electronics Entertainment Essays]

Research Papers
4487 words (12.8 pages)

Related Searches

Equities
Common Stock $100,000
Retained earnings 0
$100,000

Rinehart was very pleased to be operating at a profit in such a short time. December sales had been 750 units, up from 500 in November, enough to report a profit for the month and to eliminate the deficit accumulated in October and November. Sales were expected to be 1,000 units in January, and Rinehart¡¯s projections showed sales increases of 500 units per month after that. Thus, by May, monthly sales were expected to be 3,000 units. By September, that figure would be 5,000 units.
Rinehart was very conscious of developing good sales channel relationships in order to increase sales, so Puzzler deliveries were always prompt. This required production schedules 30 days in advance of predicted sales. For example, Fun Games had produced 1,000 Puzzlers in December for January sales, and would produce 1,500 in January for February¡¯s demand. The company billed its customers with stated terms of 30 days net, but did not strictly enforce this credit terms with the result that customers seemed to be taking an additional month to pay. All of the company's costs were paid in cash in the month in which they were incurred.
Rinehart's predictions came true. By March, sales had reached 2,000 Puzzlers, and 2,500 units were produced in March for April sale. Total profit for the year by March 31 had reached $24,000. In order to get a respite from the increasingly hectic activities of running the business, in mid-April Rinehart went on a family vacation.
Within the week, the company's bookkeeper called. Fun Games bank balance was almost zero, so necessary materials could not be purchased. Unless Rinehart returned immediately to raise more cash, the entire operation would have to shut down within a few days.

Questions

1. Prepare monthly income statements, balance sheets, and cash budgets based on sales increases of 500 units per month and 30-day advance production for January through September. When will the company need extra funds? How much will be needed? When can a short-term loan to cover the need be repaid?

In April through July, the company needs extra funds, respectively $1,000, $9,000, $5,000 and $1,000. These short-term bank loans can be repaid till October.

2. How is it possible that a company starts with $100,000 in capital and has profitable sales for a period of six months and still ends up with a zero bank balance? Why did Fun Games need money in April? How could this need have been avoided?

Because the company schedules the production 30 days in advance of predicted sales, and allow the customers take 2 months to pay. The inventory and the sales are increasing faster than the collecting of the accounts receivable.

In April: Inventory $42,000 Retained Earnings: $40,000
Accounts Receivable 99,000 Capital: 100,000
$141,000 $140,000
Fun ¡®n¡¯ Games, therefore, needed $1,000 in April (141,000-140,000).

This problem could have been avoided if the company strictly controlled the collection of the accounts receivable. For example, if they enforced the customers to pay the bill as the credit terms of 30 days net, the financial data would be as follow:

The total of the capital and retained earnings will always be greater than the total of accounts receivable and inventory, and the needs for extra funds can be avoided.

3. What would be the effect of this situation on the company's ability to operate? To answer this Question, consider what activities would be affected, what individuals would be touched and how would they be affected?

This situation will have a negative effect on the company's ability to operate. The production and the deliveries may be delayed because of the lack of the capital. And thus it will destroys the relationship with the customers in some degree and decrease the sales. The short of the money also may delay or reduce the salary and depress the workers motivation.
Return to 123HelpMe.com