CS-29 Master Budget with Supporting Budgets You have just been hired as a new management trainee by Quik-Flik Sales Company, a nationwide distributor of a revolutionary new cigarette lighter. The company has an exclusive franchise on distribution of the lighter, and sales have grown so rapidly over the last few years that it has become necessary to add new members to the management team. You have been given direct 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 favorable impression on the president and have assembled the information below. The company desires a minimum ending cash balance each month of$10,000. The lighters are forecast to sell for $8 each. Recent and forecast sales in units are: January (actual): 20,000 February (actual): 24,000 March (actual): 28,000 April: 35,000 May: 45,000 June: 60,000 July: 40,000 August: 36,000 September: 32,000 The large buildup in sales before and during the month of June is due to Father's Day. Ending inventories are supposed to equal 90 percent of the next month's sales in units. The lighters cost the company $5 each. Purchases are paid for as follows: 50 percent in the month of purchase and the remaining 50 percent in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25 percent of a month's sales are collected by month-end. An additional 50 percent is collected in the month following, and the remaining 25 percent is collected in the second month following. Bad debts have been negligible. Companies monthly operating expenses are given below: - Variable sales commission 1$ per lighter - Fixed wages and salaries 22.000$ Salaries 22000 Utilities 14000 Insurance expired 1200 Depreciation 1500 Misc. 3000 All operating expenses are paid during the month, in cash, with the exception of depreciation and insurance expired. New fixed assets will be purchased duirng May for $25.000 cash. The company declares dividents of $12.000 each quarter, payable in the first month of the following quarter. Assets: Cash $ 14,000 Accounts Receivable $48,000 February sales; 25% of the total remains, $168,000 March sales; 75% of the total remains 216,000 Inventory (31,500 units) 157,500 Unexpired insurance 14,400 Fixed assets, net of depreciation 172,700 Total Assets $ 574,600 Liabilities and Stockholders' Equity: Accounts payable, (purchases) $ 85,750 Dividends payable 12,000 Short-term notes payable -0- Capital stock, no par 300,000 Retained earnings 176,850 Total Liabilities and Stockholders' Equity $ 574,600 The company can borrow money from its bank at 12% annual interest. All borrowing must be done at the beginning of a month, and repayments must be made at the end of a month. Repayments of principal must be in round $1,000 amounts. (Principal and interest will not be in $1,000 amounts. Remember when calculating interest on each borrowing to include the month it was borrowed plus the month(s) that balance was outstanding.) Interest is computed and paid at the end of each quarter on all loans outstanding during the quarter. Round all interest payments to the nearest whole dollar. Compute interest on whole months (1/12, 2/12 and so forth). The company wishes to use any excess cash to pay loans off as rapidly as possible. please create a budgeted balance sheet as of June 30