Capital Expenditure and Cash Budget Information

• The company plans to pay cash for property, plant, and equipment totaling $35,000 at the end of the fourth quarter. This purchase will not affect depreciation expense for the coming year.
• The company expects to collect 70 percent of sales in the quarter of sale and 30 percent the quarter following the sale. Accounts receivable at the end of last year totaled $200,000, all of which will be collected during the first quarter of this coming year.
• All inventory purchases are on credit. The company expects to pay 80 percent of inventory purchases in the quarter of purchase and 20 percent the following quarter. Accounts payable at the end of last year totaled $68,000, all of which will be paid during the first quarter of this coming year.
• The cash balance at the beginning of this coming year is expected to be $90,000.

Budgeted Balance Sheet Information

• Assume 30 percent of fourth quarter budgeted sales will be collected in full the following year (this represents accounts receivable at the end of the fourth quarter).
• Expected account balances at the end of the fourth quarter are:

Property, plant, and equipment (net)	$120,000
Common stock	$175,000

• Actual retained earnings at the end of the last year totaled $252,000, and no cash dividends will be paid during the current budget period ending December 31.

• Current assets
  Cash
  Accounts receivable
  Merchandise inventory
  Total current assets
  Plant and equipment (net)
  Total assets
  Current liabilities
  Accounts payable
  Shareholders' equity
  Common stock
  Retained earnings
  Total liabilities and shareholders' equity