Assessment 8: Master Budget and Flexible Budget Preparation Worksheet Part A Solve the given problem based on the following scenario. The managers of Crouch Corp. need you to create the master budget for the months of January, February, and March of 2018. Company name Balance sheet date Ending date of first quarter Crouch Corp. 12/31/2017 3/31/2018 Master budget for January February March April Crouch Corp. Estimated Balance Sheet (as of December 31, 2017) Crouch Corp. Estimated Balance Sheet (as of December 31, 2017) Assets ($) Assets ($) Cash 32,400 Cash Accounts receivable 32,400 472,500 Accounts receivable 472,500 Inventory 135,000 Inventory 135,000 Total current assets 639,900 Total current assets 639,900 Equipment 486,000 Equipment Net equipment Less accumulated depreciation 486,000 (60,750) Less accumulated depreciation (60,750) Net equipment Total assets 425,250 1,065,150 Total assets 425,250 1,065,150 Liabilities and Equity ($) Liabilities and Equity ($) Accounts payable 324,000 Accounts payable 324,000 Bank loan payable 13,500 Bank loan payable Taxes payable (due 3/15/2018) Total liabilities Common stock Retained earnings Total stockholders' equity 13,500 81,000 418,500 Taxes payable (due 3/15/2018) 81,000 425,250 221,400 Total liabilities Common stock Retained earnings 418,500 425,250 221,400 Total stockholders' equity Total liabilities and equity 646,650 1,065,150 Total liabilities and equity 646,650 1,065,150 TRUE TRUE TRUE TRUE Use the following data to prepare the master budget. A single product of Crouch Corp. can be purchased for $25 per unit and resold for $50 per unit. The anticipated inventory level on December 31, 2017, is 2,500 units. This is actually more than its desired level for 2018, which is 20% of January's projected sales (in units). Projected sales are: 5,250 units for January 6,750 units for February 8,250 units for March Unit sale price Unit purchase price $25 $50 Anticipated inventory on December 31, 2017 2500 units Ratio of inventory to future sales 20% of next month's desired sales January projected sales 5250 units February projected sales 6750 units March projected sales 8250 units April projected sales 7500 units 7,500 units for April Cash sales (percentage of total sales) 25%