Cash Accounts receivable Inventory Equipment Less: Accumulated depreciation Total assets Liabilities and Equity Liabilities Accounts payable Coan payable Taxes payable (due March 15) Equity Common stock Retained earnings Total liabilities and equity $636,000 79,500 $365,000 14,000 91,000 $ 471,000 298,500 $ 20,500 520,000 142,500 556,500 $1,239,500 470,000 769,500 $1,239,580 To prepare a master budget for January, February, and March, use the following information. a. The company's single product is purchased for $30 per unit and resold for $59 per unit. The inventory level of 4,750 units on December 31 is more than management's desired level, which is 20% of the next month's budgeted sales units. Budgeted sales are January,6,750 units; February, 8,750 units; March, 11,000 units; and April, 11,000 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $259,388; February, $728.239; March, $529,731 c. Cash payments for merchandise purchases are budgeted as follows: January $65,000; February, $322,500; March, $145,200. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $7,000 per month. e. General and administrative salaries are $12,000 per month. Maintenance expense equals $1,800 per month and is paid in cash. t New equipment purchases are budgeted as follows: January, $40,800, February $103,200, and March, $26,400. Budgeted depreciation expense is January: $ 7050, February, $8.125; and March, $8,400. 9. The company budgets a land purchase at the end of March at a cost of $170,000, which will be paid with cash on the last day of the month. h. The company has an agreement with its bank to obtain additional loans as needed. The interest rate is 1% per month and interest is paid at each month-end based on the beginning-month balance Partial or full payments on these loans are made on the last day of the month. The company maintains a minimum ending cash belance of $20,500 at the end of each month. L. The income tax rate for the company is 43%. Income taxes on the first quarter's income will not be paid until April 15. Required: Prepare a master budget for the months of January, February, and Merch that has the following budgets: 1. Sales budget. 2. Merchandise purchases budgets. 3. Selling expense budgets. 4. General and administrative expense budgets Hint Depreciation is included in the general and administrative budget for merchandisers 5. Capital expenditures budgets 6. Cash budgets 7. Budgeted income statement for entire quarter (not monthly) ended March 31 8. Budgeted balance sheet as of March 31