Back Country Outfitters Inc., based in Nelson, British Columbia, assembles snowboards for the serious snowboarder. It buys the boards already cut to size and adds the various fittings required to make a first-class board. These boards sell for $500 each to distributors, who in turn sell them to the snowboarding enthusiast for prices ranging from $899.99 to $1,199.99, depending on location.

Back Country manages its inventory so that there are no in-process boards at the end of any quarter. The results for the past year are shown below:

The company expects unit sales to increase by 10 percent per year in each of the next two years and for the selling price to remain constant. Production costs are also expected to remain con- stant for the coming year. The following facts and policies have been stipulated for the company:
• Sales in 2014 followed a seasonal pattern so that first-quarter sales were 1,200 units, second- quarter sales were 1,600 units, third-quarter sales were 800 units, and fourth-quarter sales were 400 units. This pattern is expected to remain consistent into the future.
• Cash sales amount to only 10 percent of total sales. Collections of credit sales have followed a pattern of 30 percent collected in the quarter of sale; 60 percent collected in the quarter following sale; and 8 percent collected in the second quarter following sale.
• All purchases of materials are made on credit, but the suppliers have imposed strict credit policies on the company so that 80 percent of all purchases must be paid in the quarter of purchase and 20 percent in the quarter following purchase.
• The company requires that 25 percent of the following quarter's production requirement for each component be maintained in ending materials inventory. In planning ending inventory of components, the company predicts that production in the first quarter of fiscal 2016 will be 10 percent higher than in 2015.
• The company also requires that 30 percent of the following quarter's sales be maintained in ending finished goods inventory. Raw materials cost for the boards themselves is $142 per board, because the boards are specially formed and finished to very exacting specifications.
• The fittings for each board cost $50, representing the foot harnesses and other hardware.
• It takes one-half hour of direct labour to assemble each board with an average wage cost, including benefits, of $36 per hour.
• In 2014, manufacturing overhead costs consisted of $20 per direct labour hour of variable overhead and $60,000 of fixed overhead, including depreciation of $20,000.
• Fixed overhead is incurred evenly by quarter over the course of the year and is allocated to production at the rate of $30 per direct labour hour.
• Selling and administrative expenses, as shown in the income statement, are all fixed except for sales commissions and bad debt expense, which vary directly with sales.
• The tax rate remains the same as last year; taxes are paid in quarter
• During 2015, the company will add $225,000 of equipment: $100,000 in the first quarter and $125,000 in the second quarter.
• At June 30, 2014, the company had $48,000 cash on hand, net accounts receivable of $151,200, and inventory of $150,525 (including 375 finished boards, 325 raw boards, and 325 fittings). Land amounted to $66,075, building and equipment to $148,000, accumulated depreciation to $68,700, accounts payable to $85,000, owners' equity to $410,100, and accumulated amortization of $418,165.
• The company borrows any money that it needs on the first day of the quarter and repays any principal and interest on that principal on the last day of the quarter. The interest rate on all loans is 6 percent per year and is accessed in $100,000 increments.
• The company requires that a minimum of $100,000 be in the bank at the end of each quarter.
Required:
Prepare a master budget for fiscal 2015, with all of its components, including pro forma income statement and pro forma balance sheet, based on the above information.

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Back Country Outfitters Inc. Statement of Income For the Year Ended June 30, 2014 $2,000,000 Sales 940,000 1,060,000 Cost of goods sold Gross margin Selling and administrative expenses Salaries 185,500 100,000 36,000 30,000 25,000 18,000 15,000 15,000 424,500 Sales commissions Bad debt expense Facilities rental Advertising and promotion Depreciation Professional fees Office expenses Total selling and administrative 635,500 254,200 S 381,300 Net income before tax Income tax expense Net income