Accounting Principles II

Master Budget Project

Wild Wood Company's management asks you to prepare its master budget using the following information.

The budget is to cover the months of April, May, and June of 2011.

Wild Wood Company

Balance Sheet

March 31, 2011

Assets

Liabilities and Equity

Cash

50,000

Accounts payable

156,000

Accounts receivable

175,000

Short-term notes payable

12,000

Inventory

126,000

Total current liabilities

168,000

Total current assets

351,000

Long-term note payable

200,000

Equipment, gross

480,000

Total liabilities

368,000

Accumulated depreciation

-90,000

Common stock

235,000

Equipment, net

390,000

Retained earnings

138,000

Total stockholders' equity

373,000

Total assets

741,000

Total liabilities and equity

741,000

Additional Information:

1)

Sales for March total 10,000 units. Each month's sales are expected to exceed the prior month's

results by 5%. The product's selling price is $25 per unit.

2)

Company policy calls for a given month's ending inventory to equal 80% of the next month's

expected unit sales. The March 31 inventory is 8,400 units, which complies with the policy.

The purchase price is $15 per unit.

3)

Sales representatives' commissions are 12.5% of sales and are paid in the month of the sales. The

sales manager's monthly salary will be $3,500 in April and $4,000 per month thereafter.

4)

Monthly general and administrative expenses include $8,000 administrative salaries, $5,000

depreciation, and 0.9% monthly interest on the long-term note payable.

5)

The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables

are collected in full in the month following the sale (none is collected in the month of the sale).

6)

All merchandise purchases are on credit, and no payables arise from any other transactions. One

month's purchases are fully paid in the next month.

7)

The minimum ending cash balance for all months is $50,000. If necessary, the company borrows

enough cash using a short-term note to reach the minimum. Short-term notes require an interest

payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds

the minimum, the excess will be applied to repaying the short-term notes payable balance.

8)

Dividends of $100,000 are to be declared and paid in May.

9)

No cash payments for income taxes are to be made during the second calendar quarter. Income

taxes will be assessed at 35% in the quarter

10)

Equipment purchases of $55,000 are scheduled for June.

REQUIRED

1)

Prepare sales budget, including budgeted sales for July

2)

Prepare purchases budget, the budgeted cost of goods sold for each month and quarter, and the

cost of the June 30 budgeted inventory

3)

Prepare the operating expense budget

4)

Prepare the budgeted Income Statement

5)

Prepare expected cash receipts from customers and the expected June 30 balance of accounts

receivable

6)

Prepare expected cash payments for purchases and the expected June 30 balance of accounts

payable

7)

Prepare budgeted cash payments for operating expenses

8)

Prepare the cash budget

9)

Prepare the budgeted Balance Sheet

10)

Prepare the budgeted Statement of Cash Flows

This is the format in which i need it answered.

Problem 22-5B
Sales Budget
	January	February	March	Total
Budgeted Units
Budgeted Unit Sales Price
Budgeted Sales in Dollars
Total
Merchandise Purchases Budget
	January	February	March	Total
Next Period's unit sales
Ratio of inventory to future sales
Budgeted ending inventory
Add Budgeted sales
Required available merchandise
Less Beginning Inventory
Units to be purchased
Budgeted Cost Per Unit
Budgeted merchandise purchases
Selling Expense Budget
	January	February	March	Total
Budgeted Sales
Sales commission percent
Sales Commissions Expense
Sales Salaries
Total Selling Expenses
General and Administrative Expense Budget
	January	February	March	Total
Salaries
Maintenance
Depreciation
Total Expenses
Depreciation Expense Calculations	January	February	March	Total
Capital Expenditures Budget
	January	February	March	Total
Equipment Purchases
Land Purchase
Total
Budgeted Cash Collections from Customers
	January	February	March	Total
Total Sales
Cash Sales
Credit Sales
Cash Collections
Receivables
Month after sale
Second Month
Total from Credit customers
Cash Sales
Total Cash Received
Budgeted Cash Payments for Purchases
	January	February	March	Total
Credit Purchases
Accounts Payable
Month after purchase (20%)
Second month (80%)
Total paid for purchases
Cash Budget
	January	February	March
Beginning Cash Balance
Cash Receipts from Customers
Total Cash Available
Cash Disbursements:
Payments for Purchases
Sales Commissions
Sales Salaries
General & Administrative Salaries
Maintenance Expense
Interest
Taxes Payable
Purchase of Equipment
Purchase of land
Total Cash Disbursements
Preliminary Balance
Repayment of loan to bank
Ending Cash Balance
Loan balance, end of month
Isle Corporation
Budgeted Income Statement
For the Quarter ended March 31, 2014
Budgeted Balance Sheet
Isle Corporation
Budgeted Balance Sheet
31-Mar-14
Assets
Cash				Cash budget
Accounts receivable				Note 1
Inventory				Note 2
Total Current Assets
Land				Capital budget
Equipment				Note 3
Less accumulated depreciation				Note 4
Total Assets
Liabilities and Equity
Accounts payable				Note 5
Bank loan payable				Cash Budget
Taxes payable				Income Statement
Total liabilities
Common stock
Retained earnings				Note 6
Total stockholders' equity
Total liabilities and equity
Budgeted Statement of Cash Flows
Isle Corporation
Budgeted Statement of Cash Flows
For the Quarter ended March 31, 2013