BUS2003 Excel Assignment - Budgeting Budget Question: Knockoffs Unlimited, a nationwide distributor of low-cost imitation designer necklaces, has an exclusive franchise on the distribution of the necklaces, and sales have grown so rapidly over the past few years that it has become necessary to add new members to the management team. To date, the company's budgeting practices have been inferior, and, at times, the company has experienced a cash shortage. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are anxious to make a favourable impression on the president and have assembled the information below. The necklaces are sold to retailers for the amount in Cell B12 each. Recent and forecasted sales in units are as follows: 70,000 January (actual) February (actual) March (actual) April May Selling price per unit $ 30,000 June 46,000 July 59,000 August 85,000 September 109,000 11.00 50,000 48,000 45,000 All sales are on credit, with no discount, and payable within 30 days. Bad debts have been negligible. Collection of credit sales are as follows: In the month of sale In the month following the sale 65% In the second month following the sale 10% 25% The large buildup in sales before and during May is due to Mother's Day. Ending inventories should be equal to 40% of the next month's sales in units $ 5.00 necklace cost Purchases are paid for as follows: In month of purchase In month following purchase 60% 40% The company's monthly selling and administrative expenses are given below: 4% of sales Variable: Sales commissions Fixed: Advertising $ Rent $ Wages and salaries $ Utilities $ Insurance $ Depreciation $ 260,000 28,000 130,000 15,000 7,000 34,000 All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. The company plans to pay cash for the following planned equpment purchases: In April $ In May $ 24,000 In June $ 60,000 The company declares dividends each quarter, payable in the first month of the following quarter. Quarterly dividend amount $ 19,000 The company's balance sheet at March 31 is given below: Assets Cash Accounts receivable Inventory Prepaid insurance Fixed assets, net of depreciation $ 94,000 $ 518,000 $ 136,000 $ 49,000 $ 1,050,000 A/R consists of: February sales to be collected March sales to be collected $ $ $ 46,000 472,000 518,000 February sales to be collected March sales to be collected $ $ Inventory Prepaid insurance Fixed assets, net of depreciation Total assets $ 136,000 S 49,000 $ 1,050,000 $ 1,847,000 46,000 472,000 518,000 $ Liabilities and Shareholders' Equity Accounts payable Dividends payable Common shares Retained earnings Total liabilities and shareholders' equity $ 138,800 $ 19,000 $ 1,000,000 $ 689,200 $ 1,847,000 All borrowing is done at the beginning of the month, with any repayments made at the end of the month. The interest must be paid at the end of each month based on the outstanding loan balance for that month. The company requires a minimum cash balance of: $ 50,000 Monthly Interst rate 1% Required: Create an Excel template using the appropriate labeled "tab" which will solve the questions below using cell references, such that when data on the "Question" Tab is changed, the solution template will automatically update the solution using the new data. Your template tabs should include, for the second quarter of the year (April - June): a) A sales budget by month and in total. b) A schedule of expected cash collections from sales, by month and in total. c) A merchandise purchases budget in units and in dollars. Show the budget by month and in total. d) A schedule of expected cash disbursements for merchandise purchases, by month and in total. e) A cash budget. Show the budget by month and in total. f) A budgeted income statement for the three-month period ending June 30. Use the variable costing approach. g) A budgeted balance sheet as of June 30