ABCD Corp prepares its master budget on a quarterly basis and has a September 30 year end. The following data and information has been prepared to help you prepare the master budget for the first quarter of the fiscal year (October thru December). Info provided as follows:

1.

Actual Sales for September, 2019 and projected sales for October, November and December, 2019 and January 2020 are as follows:

September $280,000

October $400,000

November $600,000

December $1,800,000

January $700,000

2.

Monthly sales are 32% on cash and 68% on credit. Customer payments on credit sales are collected as follows: 27% in the month of sale and 73% in the month following the month of sale.

3.

At September 30 ABCD Corp had outstanding accounts receivable of $190,400 and are a result of September credit sales. This amount will be collected as follows: 100% in October.

4.

ABCD Corps Gross Profit Percentage is 63%. Therefore Cost of Goods Sold comprise 37% of monthly sales.

5.

Monthly Expenses are budgeted as follows. All expense amounts are paid in the month they are incurred.

a. Sales and Wages: $31,000 per month

b. Advertising: $74,000 per month

c. Shipping: 7% of Sales

d. Miscellaneous Expenses: $10,000 + 6% of sales

6.

Depreciation Expense is expected to be $42,000 each quarter.

7.

ABCDs Ending Inventory at September 30 is $44,400. Ending Inventory for October, November and December should equal 30% of the following months Cost of Goods Sold.

8.

60% of inventory purchases are paid for in the month of purchase; the remaining 40% paid for in the following month. At September 30 the Company still owed $72,000 to vendors for their September inventory purchases---this amount will be paid in October.

9.

During October, the company plans to purchase a new copy machine for $200,000 cash. During December, other equipment will be purchased for cash at a cost of $30,000.

10.

During November, the company will declare and pay $100,000 in cash dividends.

11.

ABCDs Cash balance at September 30 is $40,000.

12.

Has an agreement with a local bank that allows them to borrow in increments of $1,000 at the beginning of each month. The interest rate on the on loans is 1% per month and for simplicity well assume the loan is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of each quarter to the extent it has available funds exceeded the $40,000 minimum balance amount.

Prepare the following Schedules for October, November and December.

a. INVENTORY PURCHASES CASH DISBURSEMENTS BUDGET

b. CASH (RECEIPTS AND DISBURSEMENTS) BUDGET