Crossley Company

Cash Budget

For the Year ended December 31, 2018

		QTR 1	QTR 2	QTR 3	QTR 4
Cash Receipts-operating:
Current quarter		5,569,200	8,353,800	9,746,100	4,176,900
Previous quarter		3,069,360	2,998,800	4,498,200	5,247,900
Total cash collections		8,638,560	11,352,600	14,244,300	9,424,800
Cash payments-operating:
Materials purchases		2,600,000	2,365,650	3,149,250	3,104,370
Labor		2,347,920	3,359,880	3,635,280	1,751,544
Variable overhead		1,565,280	2,239,920	2,423,520	1,167,696
Variable sales commissions		187,425	299,880	449,820	524,790
Fixed overhead		524,000	524,000	524,000	524,000
Fixed selling		850,000	850,000	850,000	850,000
Fixed admin		980,000	980,000	980,000	980,000
Total operating payments		9,054,625	10,619,330	12,011,870	8,902,400
Total cash provided/
used by operations		(416,065)	733,270	2,232,430	522,400
Other payments/receipts:
Capital expenditure		-	-	(1,950,000)	-
Dividends		(250,000)	(250,000)	(250,000)	(250,000)
Note payment (p&I)		-	260,000	-	260,000
Total cash provided/used		(666,065)	743,270	32,430	532,400
Add: beginning cash balance		1,625,000	958,935	1,702,205	1,734,635
Ending cash balance		958,935	1,702,205	1,734,635	2,267,035

MATERIALS PURCHASES BUDGET		QTR 1	QTR 2	QTR 3	QTR 4	YR		Q1-2019
Budgeted production		43480	62220	67320	32436	205456		51408
Std feet per unit		10	10	10	10	10		10
Total feet for production		434800	622200	673200	324360	2054560		514080
+EI required	15%	93330	100980	48654	77112	77112
Total feet needed		528130	723180	721854	401472	2131672
_BI		55000	93330	100980	48654	55000
Total feet to be purchased		473130	629850	620874	352818	2076672
$5/ft		5	5	5	5	5
Total cost of purchases		2365650	3149250	3104370	1764090	10383360

SELLING & ADMIN BUDGET
Variable selling-commissions	3.50%	299880	449820	524790	224910	1499400
Fixed selling		850000	850000	850000	850000	3400000
Fixed admin		980000	980000	980000	980000	3920000
Depreciation-selling		75000	75000	75000	75000	300000
Depreciation-admin		120000	120000	120000	120000	480000
Total budgeted selling & admin cost		2324880	2474820	2549790	2249910	9599400

Income Statement

Income before tax

(82880)

1,135,180

1,801,710

(814,410)

2039600

			CROSSLEY COMPANY
			BALANCE SHEET
			AT DECEMBER 31
			2018		2017
ASSETS
Cash					1625000
Accounts receivable					3069360
Inventory
Raw materials				275000
Finished goods				481600	756600
Property, plant and equipment, net					2939555
Total Assets					8390515
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable					2600000
Commissions payable					187425
Note payable					1500000
Common stock, no par					2450000
Retained earnings					1653090
Total Liabilities and Stockholders Equity					8390515

Presented on the template provided is Crossleys projected balance sheet at 12/31/17. Prepare a budgeted balance sheet at 12/31/18 next to it, then answer the following questions in the space below your balance sheets. Label your answers, but the amounts themselves should be calculated by formulas that include cell references:

What is the budgeted return on investment (round your answer to the nearest one percent)?

If the company has established a minimum required rate of return of 22% for Crossley, what is budgeted residual income (round your answer to the nearest dollar)?

If the CEO of Crossley has set a target ROI of 28%, how many units would the company have to sell for the year (round your answer to the nearest whole unit)?