BGV the maker of industrial liquidating agents is preparing the budget for 2023. The sales department has indicated annual sales of selling price to be set at RM 40,000 units and the 90 per unit. 85 per unit. The selling price of the product for 2022 was RM For the 1st Quarter 2nd Quarter 3rd Quarater sales will be 10% of annual sales sales will be 30% of annual sales sales will be annual sales respectively while for remaining will be It is expected customers always pay However, in the 3rd quarter, remaining amount in the next quarter. For the 4th Quarter, remaining amount in the next quarter. 40% of 20% in the 4th Quarter 100% of their purchases within the same quarter. 90% will be collected in the quarter and the 85% will be collected in the quarter and the The company intends to have an inventory of finished products of 1,500 units at the end of the budget year. Each quarter will also require an ending finished inventory in order not to be in a situation of a stock out. Each product requires 3 kg of raw materials and D:\12 Unitar Lecturing\02 Lecturing 6. GSFM7514 Accounting and Finance for Decision Making \03 Assignments\Assignment 1\01 Assignment Master Budget 2023 page 1 of 3 4 hours of labour time to complete. The raw material is RM 10 per kg and workers are paid RM 7 per hour. 5,000 kg of raw materials at the end of The production department intends to have the budget year. Each quarter will also require an ending inventory as a precaution against any shortages in the supply of raw materials. The production requires variable overheads that is set based on direct labour hours. The predetermined rate is RM Annual Fixed Overhead expensesin RM are as follows:- 1.50 per direct labour hour. a. Factory Rent b. Depreciation for machines c. Factory Maintenance and Cleaning 120,000 30,000 60,000 Other non-manufacturing expenses annually are as follows:- a. Advertising 150,000 b. Salaries 360,000 c. Office Expenses 30,000 d. Depreciation for office equipment is 40,000 e. Rent of the administration building is 60,000 Additional information a. The company will be paying the 2022 tax payable in the 2nd Quarter of 2023. b. An equipment will be purchased in the 1st Quarter at a cost of RM 250,000.00 c. Principal payment to reduce the Non-Current Liabilities will be made at every quarter. The amount is The interest payment of RM RM 12,500 every quarter. 12,000 will also be paid every 8% and the loan must be settled d. Interest rate for any short-term loans will be within the same year that it is made. Any extension of payment will need further negotiation with the bank. e. Dividends will be paid on the 4th Quarter. It was suggested that dividend amount is RM 70,000.00 f. The number of ordinary shares is 1,000,000 units In 2022, the average share price is RM The average industry PE ratio is 1.20 g. The cost of capital for the company is 6.00 times. 12% INCOME STATEMENT 2022 Sales 2,500,000 Cost of Goods Sold 1,650,000 Gross Margin 850,000 Selling and Administration Expense 540,000 EBITDA 310,000 Depreciation 25,000 EBIT 285,000 Interest Expense 48,000 D:\12 Unitar Lecturing\02 Lecturing 6. GSFM7514 Accounting and Finance for Decision Making \03 Assignments\Assignment 1\01 Assignment Master Budget 2023 page 2 of 3 Earning Before Tax 237,000 Corporate Tax 59,250 Net Income 177,750 Previous Retain Earnings 207,250 add: Net Income 177,750 less: Dividends 50,000 New Retained Earnings 335,000 BALANCE SHEET 2022 Current Assets Cash Trades Receivables Raw Materials Inventories 49,250 70,000 80,000 200,000 Total Current Assets 399,250 Land 1,000,000 Plant and Machines 1,645,000 Accumulated Depreciation 900,000 Plant and Machines Net 745,000 Total ASSETS 2,144,250 Current Liabilities Trade Payables 150,000 Taxes Payable 59,250 Total Current Liablilities 209,250 Non Current Liabilities 600,000 Stockholders Equity Common Stock 1,000,000 Retained Earnings 335,000 Total Equity 1,335,000 Total LIABLITIES AND EQUITY 2,144,250 Required: a) Prepare a complete Master Budget for 2023