Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:

	Sales in Units
April		52,000
May		75,000
June		92,000
July		81,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 15% of the following months sales. The inventory at the end of March was 7,800 units.

Required:

Prepare a production budget for the second quarter; in your budget, show the number of units to be produced each month and for the quarter in total.

	APRIL	MAY	JUNE	QUARTER
Budgeted unit sales
total needs
required production in units

Minden Company is a wholesale distributor of premium European chocolates. The companys balance sheet as of April 30 is given below:

Minden Company Balance Sheet April 30
Assets
Cash	$	14,600
Accounts receivable		55,000
Inventory		43,500
Buildings and equipment, net of depreciation		223,000
Total assets	$	336,100
Liabilities and Stockholders Equity
Accounts payable	$	74,500
Note payable		15,000
Common stock		180,000
Retained earnings		66,600
Total liabilities and stockholders equity	$	336,100

The company is in the process of preparing a budget for May and has assembled the following data:

a.	Sales are budgeted at $244,000 for May. Of these sales, $73,200 will be for cash; the remainder will be credit sales. One-half of a months credit sales are collected in the month the sales are made, and the remainder is collected in the following month. All of the April 30 accounts receivable will be collected in May.
b.	Purchases of inventory are expected to total $130,000 during May. These purchases will all be on account. Forty percent of all purchases are paid for in the month of purchase; the remainder are paid in the following month. All of the April 30 accounts payable to suppliers will be paid during May.
c.	The May 31 inventory balance is budgeted at $40,500.
d.	Selling and administrative expenses for May are budgeted at $84,300, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $3,950 for the month.
e.	The note payable on the April 30 balance sheet will be paid during May, with $430 in interest. (All of the interest relates to May.)
f.	New refrigerating equipment costing $7,800 will be purchased for cash during May.
g.	During May, the company will borrow $20,700 from its bank by giving a new note payable to the bank for that amount. The new note will be due in one year.

Required:
1-a.	Prepare a schedule of expected cash collections from sales and a schedule of expected cash disbursements for merchandise purchases..

1-b.	Prepare a cash budget for May. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

2.	Prepare a budgeted income statement for May.

3.	Prepare a budgeted balance sheet as of May 31.

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You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the companys operations:

a.	The cash balance on December 1 is $53,200.
b.	Actual sales for October and November and expected sales for December are as follows:

	October		November		December
Cash sales	$	75,600	$	89,000	$	88,200
Sales on account		410,000		574,000		609,000

	Sales on account are collected over a three-month period as follows: 20% collected in the month of sale, 60% collected in the month following sale, and 18% collected in the second month following sale. The remaining 2% is uncollectible.
c.	Purchases of inventory will total $318,000 for December. Thirty percent of a months inventory purchases are paid during the month of purchase. The accounts payable remaining from Novembers inventory purchases total $172,000, all of which will be paid in December.
d.	Selling and administrative expenses are budgeted at $525,000 for December. Of this amount, $57,700 is for depreciation.
e.	A new web server for the Marketing Department costing $82,000 will be purchased for cash during December, and dividends totaling $12,000 will be paid during the month.
f.	The company maintains a minimum cash balance of $20,000. An open line of credit is available from the companys bank to bolster the cash position as needed.

Required:
A.	Prepare a schedule of expected cash collections for December.

B.	Prepare a schedule of expected cash disbursements for merchandise purchases for December.

C.

Prepare a cash budget for December. Indicate in the financing section any borrowing that will be needed during the month. Assume that any interest will not be paid until the following month.