Completing a Master Budget LO7-2. LO7-4. LO7-7. LO7-8, LO- LO7-10 Comely Inc. prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: As of December 31 (the end of the prior quarterl, the company's general ledger showed the followina $61,000 $216,800 $60,900 Cash Accounts receivable nventory Buildings and equipment $ 371000 Accounts payable Common stock Retained earnings 91,425 500,000 709,700 Actual sales for December and budgeted sales for the next four months are as follows December (actual) February $271,000 $ 406,000 $603,000 $318,000 $214,000 March Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale The accounts receivable at December 31 are a result of December credit sales. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) Monthly expenses are budgeted as follows: salaries and wages, $36,000 per month: advertising, $60,000 per month shipping. 5% of sales, other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $45,460 for the quarter Each month's ending inventory should equal 25% of the following month's cost of goods sold One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the During February, the company will purchase a new copy machine for $3,100 cash. During March, other equipment will be purchased for cash at a cost of $80,500 During January, the company will declare and pay $45,000 in cash dividends -Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter Using the data above, complete the following statenents and schedules for the first quarter. Note,I included templates for the schdules as their formatting can be overly time consuming. I also included formulas for totals You are not required to use my schedulesformulas, if you prefer. you may remove my schedule and create your ule of expected cash collections Fv, Cash sales Credit sales Total cash collections AMvh $ 63,600 254 400n $ 81,200.0 $120,600 $265,400 405 0in 1327 2iMerchandise ourchases budget