A relatively new company, Wine To End Whining, Inc., has determined they need to engage in a budgeting process as part of their new strategic plan. The Company has asked you to provide the following items for the months of January, February, and March of 2017: A) a Purchases Budget; B) a Cash Budget; C) a Budgeted Income Statement; and D) a Budgeted Balance Sheet. They have provided you with the planning document below and also, with their December 31, 2016 Balance Sheet. Please complete the four items requested on Worksheet Tabs A, B, C, and D of this Workbook.

Use the information provided on the December 31, 2016 Balance Sheet shown below to help you create the budgeting documents requested.

WINE TO END WHINING, INC.
PLANNING DATA FOR 2017
All Sales are on Credit
Collections of Accounts Receivable:
Month of Service	56%
Month following Service	44%
Actual December 2016 Sales	$ 200,000
Expected Sales in Dollars
January	$ 220,000
February	$ 193,000
March	$ 178,000
April	$ 201,000
Cost of Goods Sold as a percentage of selling price.	60%
Planned ending inventory as a percentage of next month's required inventory.	65%
Purchases are are all on credit.
Purchases paid in current month	30%
Purchases paid in next month	70%
Sales commission as a percent of sales	3%
Sales commission are paid one month after the month incurred.
Advertising expenses have a fixed and variable portion:
Fixed portion	$4,200
The fixed portion of the advertising is paid in the current month.
Variable portion as a percentage of sales	1%
The variable portion is paid one month after the month incurred.
Insurance policy:
Months of insurance coverage paid for	12
The policy period is from February 1 to January 31 each year
The premium to be paid on February 1, 2017 is	$18,000
The premium will be charged to prepaid insurance
Selling and Administrative expenses have a fixed and variable portion:
Fixed portion is paid in the month incurred	$29,000
Variable portion as a percentage of sales	2%
Variable S&A expenses are paid one month after the month incurred
Depreciation expense per month	$5,000
The annual interest rate on the long term debt is	3.5%
Interest is incurred on the principal balance outstanding each month.
Interest is paid on a quarterly basis. Interest for December to February will be paid March 1.
No principal payments are scheduled to be made on the long-term debt until September of 2017
Income Tax rate	30%
Accrued taxes are paid on the 15th of January, April, July and October
The Company's Board of Directors plans to declare a dividend on January 20	$12,000
It will be paid on February 15.

WINE TO END WHINING, INC.

BALANCE SHEET

December 31, 2016

ASSETS

Current Assets

Cash

$ 103,200

Accounts Receivable

88,000

Inventory

85,800

Prepaid Insurance

1,500

Total Current Assets

278,500

Property Plant and Equipment

Office Equipment

300,000

Accumulated Depreciation

(60,000)

Total Property Plant and Equipment

240,000

Total Assets

$ 518,500

LIABILITIES AND SHAREHOLDERS EQUITY

LIABILITIES

Current Liabilities

Accounts Payable - Purchases

$ 89,460

Sales Commission Payable

6,000

Selling and Admin Payable

4,000

Advertising Payable

2,000

Interest Payable

467

Dividends Payable

-

Income Taxes Payable

14,970

Total Current Liabilities

116,897

Long Term Debt

160,000

Total Liabilities

276,897

SHAREHOLDERS' EQUITY

Common Stock

124,000

Retained Earnings

117,603

Total Shareholders' Equity

241,603

Total Liabilities and Shareholders Equity

$ 518,500

Solution:	Actual		Budgeted		Budgeted		Budgeted
	Dec 2016		January		February		March
Desired Ending Inventory Balance for Current Month	$ 85,800
Current Month's Cost of Sales	120,000
Inventory Needed to be Available during Current Month	205,800
Less: Beginning Inventory of Current Month	78,000
Budgeted Purchase for Next Month Sales	$ 127,800

WINE TO END WHINING, INC.
PLANNED CASH TRANSACTIONS and CASH BUDGET
For the Month Ending,
	Jan 31, 2017		Feb 28, 2017		Mar 31, 2017
CASH IN
56% This Month's Sales
44% of Last Month's Sales
Total Cash Receipts
CASH OUT
70% Last Month's Purchases
30% This Month's Purchases
Commissions
Advertising
Selling & Admin.
Insurance
Interest
Dividends
Income Tax
Total Cash Disbursements
CASH BUDGET
Beginning Balance of Cash
Cash Receipts
Cash Available
Cash Disbursements
Ending Cash Balance