ABC company is a retailer of electrical goods headquartered in Sydney, operating in 15 Asian countries and 44 cities. Information about Toynbees operations in Malaysia is given below.

• November sales amounted to $400,000. Budgeted sales for December and January are $440,000 and $500,000 respectively.
• Collections from sales are expected to be 60% in the month of sale and 38% in the month following the sale. The balance is expected to be uncollectable and to remain conservative, it is recognised in the month of sale for budgetary purposes.
• Gross margin is 25% of sales revenue.
• A total of 80% of electrical goods for resale are purchased in the month prior to the month of sale, and 20% is purchased in the month of sale. Payment for the goods is made in the month following the purchase.
• Other monthly expenses paid in cash amount to $45,200
• Annual depreciation is $432,000.
• Interest expense accrues at the rate of $20,000 per month and is paid at the end of each quarter. A calendar year is used for reporting purposes.
• Income from investment is expected to continue at $80,000 per month.
• Toynbee has a policy of maintaining a minimum cash balance of $30,000 per month.

Tax rate: 0% [Toynbee is enjoying a 5-year tax holiday for making new investment]

Balance Sheet as at 30 November is as follows:

Balance Sheet as at 30 November is as follows:

Cash $ 44,000

Accounts receivable (net of $8,000 allowance for bad debts) 152,000

Inventory 280,000

Property, plant and equipment less accumulated depreciation 1,724,000

Total assets $2,200,000

Liabilities and Equity

Accounts payable $324,000

Interest payable 40,000

Ordinary shares 1,590,000

Retained earnings 246,000

Total liabilities and equity $2,200,000

(a) A Cash Budget for the month of December.

(b) A Budgeted Income Statement for the month of December.

(c) A Budgeted Balanced Sheet on 31 December.