AP10-3 Master Budget [LO 2] Techlabs operates a computer training center. The following data relate to the preparation of a master budget for January 2012. 1. At the end of 2011, the companys general ledger indicated the following balances: Debits Credits Cash $41,000 Accounts Payable $40,000 Accounts receivable 41,500 Note payable 58,000 Equipment (net) 112,000 Common stock 29,000 Retained earnings 67,500 Total $194,500 $194,500 2. Tuition revenue in December 2011 was $83,000, and tuition revenue budgeted for January 2012 is $91,000. 3. 50 percent of tuition revenue is collected in the month earned, and 50 percent is collected in the subsequent month. The receivable balance at the end of 2012 reflects tuition earned in December 2012. 4. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $32,000; rent, $4,300; depreciation on equipment, $8,000; utilities, $500; other, $2,200. 5. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $40,000 payable at the end of 2011 represents money owed for the purchase of computer equipment in December 2011. 6. The company intends to purchase $27,000 of computer equipment in January 2012. The anticipated $8,000 per month of depreciation (see number 4) reflects the addition of $1,000 of monthly depreciation related to this purchase. 7. The note is at 9 percent per annum and requires monthly interest payments of $435. The payments are made on the 20th of each month.The principal must be paid in February of 2013. 8. The tax rate is 35 percent. Complete the following budget: (Round answers to 0 decimal places, e.g. 5,250. Enter all amounts as positive amounts and subtract where necessary.) Budgeted Cash Receipts and Disbursements For January 2012 Cash Receipts Collection of December 2011 tuition = $ ___________ Collection of January 2012 tuition Total cash receipts Cash Disbursements Payment of salaries Payment of rent Payment of utilities Payment of other expenses Payment for purchases of computer equipment Payment of interest on note Payment of taxes Total cash disbursements Plus beginning cash balance Ending cash balance = $ ______________ Complete the following budget: (Round answers to 0 decimal places, e.g. 5,250. Enter all amounts as positive amounts and subtract where necessary.) Budgeted Income Statement For January 2012 Tuition revenue = $ ___________ Less: Salaries = $ ______________ Rent Utilities Other expenses Depreciation Interest expense Total expense Income before taxes Taxes on income Net income = $ ______________ Complete the following budget: (Round answers to 0 decimal places, e.g. 5,250.) Budgeted Balance Sheet As of January 2012 Assets Cash = $ _________________ Accounts receivable Equipment (net) Total assets $ = ____________ Liabilities Accounts payable = $____________ Note payable Total liabilities Stockholders equity Common stock Retained earnings Total stockholders equity Total liabilities and stockholders equity = $ ___________