1) Budgeted Income Statement

Pendleton Company, a merchandising company, is developing its master budget for 2015. The income statement for 2014 is as follows:

Pendleton Company Income Statement For Year Ending December 31, 2014
Gross sales	$2,000,000
Less: Estimated uncollectible accounts	(40,000)
Net sales	1,960,000
Cost of goods sold	(1,100,000)
Gross profit	860,000
Operating expenses (including $25,000 depreciation)	(500,000)
Net income	$360,000

The following are managements goals and forecasts for 2015:

1.	Selling prices will increase by 6 percent, and sales volume will increase by 4 percent.
2.	The cost of merchandise will increase by 3 percent.
3.	All operating expenses are fixed and are paid in the month incurred. Price increases for operating expenses will be 10 percent. The company uses straight-line depreciation.
4.	The estimated uncollectibles are 2 percent of budgeted sales.

Required Prepare a budgeted functional income statement for 2015.

Do not use negative signs with any of your answers.

Pendleton Company Budgeted Income Statement For the Year Ending December 31, 2015
Sales	$Answer
Less: Estimated uncollectible accounts	Answer
Net sales	Answer
Cost of goods sold	Answer
Gross profit	Answer
Operating expenses	Answer
Net income	$Answer

2) Cash Budget

Wilson's Retail Company is planning a cash budget for the next three months. Estimated sales revenue is as follows:

Month	Sales Revenue	Month	Sales Revenue
January	$300,000	March	$200,000
February	245,000	April	155,000

All sales are on credit; 60 percent is collected during the month of sale, and 40 percent is collected during the next month. Cost of goods sold is 70 percent of sales. Payments for merchandise sold are made in the month following the month of sale. Operating expenses total $40,000 per month and are paid during the month incurred. The cash balance on February 1 is estimated to be $30,000. Prepare monthly cash budgets for February, March, and April.

Use negative signs only with beginning and ending cash balances, when appropriate. Do not use negative signs with disbursement answers.

Wilson's Retail Company Cash Budgets February, March, and April
	February	March	April
Cash balance, beginning	$Answer	$Answer	$Answer
Total Cash receipts	Answer	Answer	Answer
Cash available	Answer	Answer	Answer
Total disbursements	Answer	Answer	Answer
Cash balance, ending	$Answer	$Answer	$Answer