And please explain in detail how to get the cash balance beginning in cash budget (requirement 4)

Assignment Question: PROFIT PLANNING Profit planning is accomplished by preparing a number of budgets that together form an integrated business plan known as the master budget. The master budget is an essential management tool that communicates managements plans throughout the organization, alocates resources, and coordinates activities This assignment consists of 2 parts Part a) You are required to prepare a further explanation on the topic given above and Part b) to answerthe following case Mong & Partners merchandising company prepares its master budget on a quartefy basis The folowing data have been assembled to assist in preparation of the master budget for the second quarter a. As of March 31 (the end of the prior quarter), the company's balance sheet showed the folowing account balances 9000 Accounts necelvable Invenitory Buildings and equipment (net Accounts payable Capital stock Retained eamings 12.800 214.100 18.300 283,700 $283.700 b. Actual sales for March and budgeted sales for Aprl July are as folows: March (actual April May 60,000 70.000 85.000 90.000 $50,000 c. Sales are 20% for cash and 806 on credit. Al payments on credit sales are collected in the month following the sale. The accounts receivable at March 31 are a result of March credit sales d. The company's gross margn percentage is 40% of sales. (in other words, cost of goods sold is 60% of sales.) e. Monthly seling and administrative expenses are budgeted as follows: salaries and wages, $7.500 per month; shipping, 6% of sales, advertising. SS00 per month; other expenses, 4% of sales Depreciation, including depreciation on new assets acquired during the quarter, will be $8,000 for the quarter e. Monthly selling and administrative expenses are budgeted as follows: salaries and wages, $7,500 per month, shipping. 6% of sales; advertising. S6.000 per month; other expenses, 4% of sales Deprecaton, ncluding depreciation on new assets acquired during the quarter, will be $6.000 for the quarter f. Each month's nding inventory should equal 30% of te foliowing month's cost of goods sok g. Half of a month's inventory puchases are paid for in the month of purchase and half in the following month. h. Equipment purchases during the quarter will be as follows: April, S11,500; and May, $3,000. i. Dividends totaling $3,500 will be declared and paid in June. J. Management wants to maintain a minimum cash balance of $8000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20.000. The interest rate on these loarss 15% per mont, and for smpicity, we wil assume that interest is not compounded. The company would, as far as itis able, repay the loan plus accumulated interest at the end of the quarter Using the data above, complete the folowing statements and scheduiles for the second quarter 1. Schedule of expected cash collections 2. a. Merchandise purchases budget Budgened cost of goods sold Add desired ending iventory $42.000 $51.000 Total needs Less beginning inventory Required purchases 70.000 51,000x 30%-$15.300 b. Schedule of expected cash disbursements for merchandise purchases For March purchases 18 300 4.700 18 300 22.360 22.30 For June purchases 40 60 3. Schedule of expected cash disbursements for selling and administrative expenses Salanies and s 7 500 8000 Oner expenses eling and adminisave ens 4. Cash budget s 9.000 Total cash For seling and administrative expenses For equipment purchases 1.600 Total cash disbursements Excess (deficiency) of cash 1650 5. Prepare an absorpion costing income statement for the quarter ending June 30 as shown in the below example Budgeted Income Statement For the Year Ended December 31, 2012 Schodulps 1$2000 000 df goods solr 00 .000 and administrative expenses operating ihcome 7 Income 100,000 cases sold $13 per case- $1,300,000. 6. Prepare a balance sheet as of June 30