Ellis Corporation prepares its master budget on a quarterly basis The following data have been assembled to assist in preparation of the master budget for the third quarter of 2019 As of June 30, 2019 (the end of the prior quarter), the company's general ledger showed the following account balances Debits Credits Cash $25,000 Accounts Receivable 75,000 Inventory 60,000 Plant and Equip (net) 190,000 Accounts Payable $60,000 Short term Notes Payable 25,000 Capital Stock 190,000 Retained earnings 75,000 $350,000 $350,000 Actual sales for June and budgeted sales for the next four months are as follows June 2019 $160,000 July 2019 220,000 August 2019 320,000 September 2019 140,000 October 2020 80,000 Monthly expenses are budgeted as follows utilities, $12,000 per month salaries and wages, $17,000 per month rent, $25,000 per month advertising, 4 percent of sales depreciation, $10,000 per month miscellaneous, 2 percent of sales At the end of each month, inventory is to be on hand equal to 30 percent of the following month's Thirty five percent of a month's inventory purchases are paid for in the month of purchase the rest is paid for in the following month Sales are 40 percent for cash and the rest are on account All sales on account are collected the month following sale The accounts receivable on June 30 are a result of June credit sales The company's gross profit rate is 36 percent of sales During July, the company will purchase a new computer for $16,000 in cash During September, other equipment will be purchased for cash at a cost of $15,000 Assume there will be no equipment purchases in August 2019 During August and September, the company will declare and pay $15,000 and $13,000 in cash dividends, respectively Assume no dividends will be paid in July The company must maintain a minimum cash balance of $12,000 An open line of credit is available at a local bank for any borrowing that may be needed during the quarter All borrowing is done at the beginning of a month, and all repayments are made at the end Borrowings and repayments of principal must be in multiples of $1,000 Interest is paid at the end of each month The interest rate is 12 percent per annum (Figure interest in whole months, e g , 1 12, 2 12 )

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Ellis Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for

Ellis Corporation prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the third quarter of 2019:

As of June 30, 2019 (the end of the prior quarter), the company's general ledger showed the following account balances:

Debits Credits

Cash $25,000 Accounts Receivable 75,000

Inventory 60,000

Plant and Equip (net) 190,000

Accounts Payable $60,000

Short-term Notes Payable 25,000

Capital Stock 190,000

Retained earnings _______ 75,000

$350,000 $350,000

Actual sales for June and budgeted sales for the next four months are as follows:

June 2019 $160,000

July 2019 220,000

August 2019 320,000

September 2019 140,000

October 2020 80,000

Monthly expenses are budgeted as follows: utilities, $12,000 per month; salaries and wages, $17,000 per month; rent, $25,000 per month; advertising, 4 percent of sales; depreciation, $10,000 per month; miscellaneous, 2 percent of sales
At the end of each month, inventory is to be on hand equal to 30 percent of the following month's =
Thirty-five percent of a month's inventory purchases are paid for in the month of purchase; the rest is paid for in the following month.
Sales are 40 percent for cash and the rest are on account. All sales on account are collected the month following sale. The accounts receivable on June 30 are a result of June credit sales.
The company's gross profit rate is 36 percent of sales.
During July, the company will purchase a new computer for $16,000 in cash. During September, other equipment will be purchased for cash at a cost of $15,000. Assume there will be no equipment purchases in August 2019.
During August and September, the company will declare and pay $15,000 and $13,000 in cash dividends, respectively. Assume no dividends will be paid in July.
The company must maintain a minimum cash balance of $12,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid at the end of each month. The interest rate is 12 percent per annum. (Figure interest in whole months, e.g., 1/12, 2/12.)