Goldberg Company is a retail sporting goods store that uses an accrual accounting system for its records. Facts regarding its operations follow:

Sales are budgeted at $220,000 for January and $200,000 for February, Due to covid, their sales are usually much higher

Collections are expected to be 60% in the month of sale and 48% in the month following the sale. Two percent of sales are expected to be uncollectible.

. Gross margin is 25% of sales.

Goldberg desires to have 80% of the merchandise for resale in the month before the end of the month sale. Payment for merchandise is made in the month following the month of purchase.

Other monthly operating expenses to be paid in cash total $22,600.

Annual depreciation is $216,000. Goldberg Companys balance sheet at the close of business on December 31 follows:

GOLDBERG COMPANY

Balance sheet

December 31, 2020

Assets:

Cash $ 45,000

Accounts receivable (net of $4,000 allowance for uncollectible accounts) 152,000

Inventory 265,000

Property, plant, and equipment (net of $680,000 accumulated depreciation) 1740,000

Total assets $ 2,202,000

Liabilities and Stockholders Equity:

Accounts payable $ 325,000

Common stock 1600,000

Retained earnings 277,000

Total Liabilities and Stockholders Equity 2,202,000

a. Prepare a budgeted income statement for January 2021.

b. Prepare a cash budget for January 2020.

c. Prepare a budgeted balance sheet as of January 31, 2020.