(0)

Master Budget Project Okay Company is preparing to build its master budget. The budget will detail each quarter's activity and the activity for the year in total. The master budget will be based on the following information: a. This will be the first year of operation for Okay Company. b. Budgeted unit sales by quarter for 2018 are projected as follows: First quarter 6,500 , Second quarter 6,000 , Third quarter 6,100& Fourth quarter 6,250 . c. The selling price is $50 per unit. Sales are estimated to be collected 70% in cash and 30% credit. d. Of the credit sales, 80% are estimated to be collected in the quarter of the sale and the remaining 20% is collected in the quarter following the sale. e. Okay's past experience indicates that cost of goods sold is about 60 percent of sales. f. Since this is the first year of operations there is no beginning inventory at the beginning of the year. Okay's ending inventory policy is 40% of the following quarter's inventory needs. Desired ending inventory for 4thQtr is $74,000. g. Okay buys inventory on account. The purchases are paid for in full the quarter following the purchase. h. Selling and administrative expenses total $15,000 per quarter, which includes $2,500 depreciation. All selling and administrative expenses requiring cash payments are paid for in the month incurred. Required: Prepare the following budgets for Okay Company for all 4 quarters and yearly total: 1. Sales budget 2. Sales Type 3. Cash Collections of Sales 4. Inventory purchases budget 5. Cash Payments of Inventory 6. Selling and Administrative expenses budget 7. Cash Payments of Selling and Administrative expenses 8. Cash budget \begin{tabular}{|c|c|c|c|c|c|c|} \hline & A & B & c & o & E & F \\ \hline 1 & Requirement \# 1 & & & & & \\ \hline 2 & \multicolumn{6}{|c|}{ Sales Budget } \\ \hline 3 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline 4 & Unit sales & & & & & \\ \hline s & X Selling Price & & & & & \\ \hline 6 & Total Sales Revenue & & & & & \\ \hline 7 & & & & & & \\ \hline 8 & Requirement \# 2 & & & & & \\ \hline 9 & & & Typ & & & \\ \hline 10 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline 11 & Cash sales & & & & & \\ \hline 12 & Credit Sales & & & & & \\ \hline 13 & Total Sales Revenue & & & & & \\ \hline 14 & & & & & & \\ \hline 15 & Requirement \#3 & & & & & \\ \hline 16[ & & Cash C & from Sale & sed In the & dget & \\ \hline 17 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline 18 & \begin{tabular}{l} Cash Collections from \\ Cash Sales \end{tabular} & & & & & \\ \hline 19 & \begin{tabular}{l} Cash Collections from \\ 1st Qtr Credit Sales \end{tabular} & & & & & \\ \hline 20. & \begin{tabular}{l} Cash Collections from \\ 2nd Qtr Credit Sales \end{tabular} & & & & & \\ \hline 21. & \begin{tabular}{l} Cash Collections from \\ 3rd Qtr Credit Sales \end{tabular} & & & & & \\ \hline 22 & \begin{tabular}{l} Cash Collections from \\ 4th Qtr Credit Sales \end{tabular} & & & & & \\ \hline 23 & \begin{tabular}{l} Total Cash Collections \\ from Sales \end{tabular} & & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline 4 & A & & c & o & E & f \\ \hline 25 & & & & & & \\ \hline 26 & Requirement \#4 & & & & & \\ \hline 27 & \multicolumn{6}{|c|}{ Inventory Purchases Budget } \\ \hline 28 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline 29 & Total Sales Revenue & & & & & \\ \hline 30 & xcGs% & & & & & \\ \hline 31 & cos & & & & & \\ \hline 32 & \begin{tabular}{l} Plus: Desired ending \\ inventory \end{tabular} & & & & $74,000.00 & 74,000.00 \\ \hline 33 & \begin{tabular}{l} Less: Beginning \\ inventory \end{tabular} & s & & & & s \\ \hline 34 & \begin{tabular}{l} TOTAL Quantity of \\ Inventory to purchase \end{tabular} & & & & & \\ \hline 35 & & & & & & \\ \hline 35 & Requirement \#5 & & & & & \\ \hline 37 & & Cash Paymen & ventory Pur & obe used 1 & Cash Budget & \\ \hline 38 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline 39 & \begin{tabular}{l} Total Cash Payments \\ for DM Purchases \end{tabular} & & & & & \\ \hline 40 & & & & & & \\ \hline 41 & & & & & & \\ \hline 42 & Requirement \# 6 & & & & & \\ \hline 43 & & & and Admin & Expense Bu & & \\ \hline 44 & & Quarter 1 & Quarter 2 & Q Quarter 3 & Quarter 4 & \begin{tabular}{l} Total \\ \end{tabular} \\ \hline 45 & Total SBA exp. Budget & & & & & \\ \hline 45 & & & & & & \\ \hline 47 & Requirement \# 7 & & & & & \\ \hline 48 & Cash & yments of Se & d Administr & enses to b & IIn the Cash Bud & \\ \hline 49 & & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total \\ \hline so & Total 58A exp. & & & & & \\ \hline s1. & \begin{tabular}{l} Less: Op. Exp. \\ Deprec. (non-cash \\ item). \end{tabular} & & & & & \\ \hlines2 & \begin{tabular}{l} Total Op. Exp. paid for \\ in Cash \end{tabular} & & & & & \\ \hline \end{tabular} Requirement #8 \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ Cash Budget } & \\ \hline & Quarter 1 & Quarter 2 & Quarter 3 & Quarter 4 & Total & \\ \hline Beg. Cash & s & & & & & . \\ \hline \begin{tabular}{l} Plus: Collect \\ Sales \end{tabular} & & & & & & \\ \hline \begin{tabular}{l} Less: Invent \\ Payments \end{tabular} & & & & & & \\ \hline \begin{tabular}{l} Less: Payme \\ 5sA Expense \end{tabular} & & & & & & \\ \hline Ending Cash & & & & & & \\ \hline \end{tabular}