Assets Cash Accounts recelvable nventory $ 18,000 262,500 75,000 Total current assets Equipment Less accumulated depreciation 355,500 $270,000 33,750 236,250 Total assets $ 591750 Liabilities and Equity Accounts payable Bank loan payable Tax payable (due 3/15/2012) $ 180,000 7,500 45,000 $ 232,500 Total liabilities Share capital-ordinary Retained earnings 236,250 123,000 359,250 Total stockholders' equity To prepare a master budget for January. February, and March of 2012, management gathers the following information. a. Simid Sports' single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 2,500 units on December 31, 2011, Is more than management's desired level for 2012, which is 20% of the next month's expected sales (in units). Expected sales are: January, 3,500 units; February, 4,500 units; March, 5,500 units; and April, 5,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, $62,500 is collected in January and the remaining $200,000 is collected in ept by February. C. Merchandise purchases are paid for as follows: 20% in the firNt month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2011, accounts payable balance, $40.000 is paid in January and the remaining $140,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $30,000 per year. e. General and administrative salaries are $72,000 per year. Maintenance expense equals $1,000 per month and is paid in cash. Required Information e. General and administrative salaries are $72,000 per year. Maintenance expense equals $1,000 per month and is paid in cash. f. Equipment reported in the December 31, 2011, statement of financial position was purchased in January 2011.I t s being depreciated over eight years under the straight -ine method with no residual value. The following amounts for new equipment purchases are planned in the coming quarter: January, $18,000: February. $48,000; and March, $14,400. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full month's depreciation is taken for the month in which equipment is purchased. g. The company plans to acquire land at the end of March at a cost of $75,000, which will be paid with cash on the last day of the month. h. Simid Sports has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $12,500 in each month. i. The income tax rate for the company is 40%. Income tax on the first quarter's income will not be paid until April 15 Required: Prepare a master budget for each of the first three months of 2012: include the following component budgets: no cells blank-be certain to enter "o" wherever required. Input all and repayment of loan to Cash Budget 12500$ 110625 244750 361000 284211 151400 10000 10000 10000 18000 Purchases of 295164 314700 13875 39461 $
