Blooms Enterprise Priest Blooms Enterprise is a retail company that sells household electronics. The budget for the forthcoming period January to March 2021 is to be prepared. Expectations for the forthcoming period include the following 1. Expected Statement of Financial Position as at 31 December 2020 $ ASSETS Non-current Assets Property Plant and Equipment (NBV) 1.232 Current Assets Inventory 308.000 Accounts Receivas 340,000 Marketable securities Casa 30,000 20.000 22 EQUITIES AND LIABILLATIES Capital Share capital Accumulated profits 1,000,000 1.216320 Current Liabilities Accounts Payable 10% Hond Payable 338.800 625.000 SICK Sales data-the company's sales for December 2020 are expected to be $900,000 and it is expected that it will increase by 10% each month over the previous month for the quarter ending March 31, 2020. Sales are expected to remain constant at March 31, 2021 level for the next three months C. Collections - credit sales are typically 70% of total sales. Outstanding amounts from sales are normally collected as follows: i i 80% during the month of sale 20% during the month after sale d. Cost of goods sold - this is normally 70% of total sales. To have adequate stocks of inventory on hand, the company attempts to have inventory at the end of each month equal to half (50%) of the next month's projected cost of goods sold. Inventory is purchased on account and usually settled as follows: i. 40% during the month of purchase 60% during the month after purchase e. Other monthly expenses Expense type Salaries Advertising and promotion Depreciation Sales commission 100,000 33,000 60,000 2% of total sales f. Equipment is to be purchased on January 1, 2021 for cash in the amount of $700,000. & The directors have indicated an intention to declare and pay dividends of $120,000 on the last day of each quarter, h. The executives believe that the company should maintain a minimum cash balance of $60,000. If the cash balance in any month is less than $60,000, then the company can borrow to cover the shortfall. Amounts borrowed must be in multiples of $1,000 (for example, $50,000 or $51,000 but not $51,500 or 51,566). The interest rate is 10% per m. Repayment of principal and interest must be made on the last day of each quarter. i. Tax payable represents 20% of Profit before Tax and will be paid April 30, 2021 (after the % , end of the first quarter) Required: Prepare the following badgets for Blooms Enterprise by month and the quarter in total for the period ending March 31, 2001 I (a) Cash budget for the period. Blooms Enterprise Priest Blooms Enterprise is a retail company that sells household electronics. The budget for the forthcoming period January to March 2021 is to be prepared. Expectations for the forthcoming period include the following 1. Expected Statement of Financial Position as at 31 December 2020 $ ASSETS Non-current Assets Property Plant and Equipment (NBV) 1.232 Current Assets Inventory 308.000 Accounts Receivas 340,000 Marketable securities Casa 30,000 20.000 22 EQUITIES AND LIABILLATIES Capital Share capital Accumulated profits 1,000,000 1.216320 Current Liabilities Accounts Payable 10% Hond Payable 338.800 625.000 SICK Sales data-the company's sales for December 2020 are expected to be $900,000 and it is expected that it will increase by 10% each month over the previous month for the quarter ending March 31, 2020. Sales are expected to remain constant at March 31, 2021 level for the next three months C. Collections - credit sales are typically 70% of total sales. Outstanding amounts from sales are normally collected as follows: i i 80% during the month of sale 20% during the month after sale d. Cost of goods sold - this is normally 70% of total sales. To have adequate stocks of inventory on hand, the company attempts to have inventory at the end of each month equal to half (50%) of the next month's projected cost of goods sold. Inventory is purchased on account and usually settled as follows: i. 40% during the month of purchase 60% during the month after purchase e. Other monthly expenses Expense type Salaries Advertising and promotion Depreciation Sales commission 100,000 33,000 60,000 2% of total sales f. Equipment is to be purchased on January 1, 2021 for cash in the amount of $700,000. & The directors have indicated an intention to declare and pay dividends of $120,000 on the last day of each quarter, h. The executives believe that the company should maintain a minimum cash balance of $60,000. If the cash balance in any month is less than $60,000, then the company can borrow to cover the shortfall. Amounts borrowed must be in multiples of $1,000 (for example, $50,000 or $51,000 but not $51,500 or 51,566). The interest rate is 10% per m. Repayment of principal and interest must be made on the last day of each quarter. i. Tax payable represents 20% of Profit before Tax and will be paid April 30, 2021 (after the % , end of the first quarter) Required: Prepare the following badgets for Blooms Enterprise by month and the quarter in total for the period ending March 31, 2001 I (a) Cash budget for the period