Hedron, Inc. is a company that re-sells one product, a particularly comfortable lawn chair. An overseas contractor makes the product exclusively for Hedron, so Hedron has no manufacturing related costs.

PRODUCT COSTS

In Nov of 2019, each lawn chair costs Hedron $4 per unit. Per an existing contract, the cost of each chair is scheduled to increase by 5% on May 1, 2020. In addition, because of increasing costs of plastic webbing, the cost is anticipated to increase by an additional 5% on Sept 1, 2020.

PRODUCT SALES

Hedron sells each chair for $10 per unit.

Year	Month	Amt
2019	Nov	11,250
	Dec	11,600
2020	Jan	10,000
	Feb	11,400
	Mar	12,600
	Apr	15,000
	May	18,000
	Jun	22,000
	Jul	18,000
	Aug	18,000
	Sep	17,000
	Oct	16,500
	Nov	12,000
	Dec	12,500
2021	Jan	11,000

To offset increasing costs of the chairs, the company plans to raise the sales price to $11.25 per unit beginning Sept 1, 2020. The sales forecast (i.e., estimated sales in units) takes this price increase into account.

CREDIT SALES

Monthly sales are 30% cash sales, 70% credit sales. 30% of credit sales are collected in the month of sale, 50% are collected the following month, and 16% are collected the 2^nd month after sale. The remaining receivables are deemed uncollectible at the end of the 2^nd month after sale. Bad debts are written off in the month the debt is deemed uncollectible

PRODUCT INVENTORY

The firms policy regarding inventory is to maintain their stock (i.e. have in ending inventory) at 40% of the forecasted sales in units for the next month. Hedron uses the first-in, first-out (FIFO) method in accounting for inventories.

40% of the inventory purchases are paid in the month of purchase with the remaining 60% paid the following month.

EQUIPMENT

A Note payment of $50,000 for equipment previously purchased is due in January and another Note payment of $30,000 is due in February. There are no Note Payables at the end of 2020.

OPERATING EXPENSES

Monthly Cash expenses are paid when incurred

Salary and Wage Exp	$3,000
Sales Commissions Exp	7% of sales revenue
Rent Exp	$8,000
Gen & Admin Variable Exp	6% of sales revenue
Supplies Exp	$2,000
Gen & Admin Fixed Exp	$24,000
Gen & Admin Depreciation Exp	$24,000

CASH MANAGEMENT

The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. (Ignore interest on the loans, but minimize the amount borrowed and pay off any loans as soon as possible.)

DIVIDENDS

Dividends of $12,000 are paid in July.

BALANCE SHEET

Balance Sheet balances as of December 31, 2019:

Cash	$ 15,000
Accounts Receivable	$ 72,590
Supplies	$ 2,000
Merchandise Inventory	$ 16,000
Buildings and Equipment	$ 1,050,000
Accumulated Depreciation	$ 526,475
Accounts Payable	$ 26,304
Notes Payable	$ 80,000
Capital Stock	$ 200,000
Retained Earnings	$ 322,811

Please show how to calculate the values for the Budgeted Balance sheet table please!

K L M N O P Aug $ Sep $ Oct $ Nous Dec s 30 240 29,988 29,106 21,168 22.050 7,200 $ 6,800 $ 6,600S 4,600S 5.000 S 73,920 24.088 64,827 53,602 52 179 17.500S 16.800 1 S 14.700 1 s 12,200 $ 11,900 S 75,600 74,970 72,765 52.920 56.125 18 000 $ 17,000 $ 16,500 $ 12,000 $ 12,500 $ 28,560 29.106 21,168 22,050 19,404 17,600 16.800 14.700 12,200 11,900 136 137 Hedron, Inc. Budgeted Income Statement For Year Ending Dec 31, 2020 138 Jan 20 100.000 $ 40.000 60 000 $ 77.150" (17.150) S Feb 20 114.000 S 45.600 58 400 S 79,068 (10.668) S Mar 20 126.000 $ 50.400 75 600 $ 80,180 14 50) $ Apr 20 150.000 S 60.000 90.000 IS 83,692 5.303 5 May 20 180.000 $ 72.000 108,000 5 87,928 20.072 5 Jun 20 220.000 $ 69.000 132 000 $ 93,800" 33,200 5 Jul 20 180.000 $ 72.000 108 000 S 89,440' 18 560 S Aug 20 180.000 $ 72 000 108 000 $ 90,560 17.440 5 Sep 20 191.250 $ 76 500 114 750 S 90.903" 23.848 5 Oct 20 185.625 $ 74.250 1 11,375 S 90,171 21.204 5 Nov 20 135.000 $ 14 000 81 000 $ 83,905 12.905) 5 Dec 20 Annual Total 140.625 $ 1,902,500 56 250 S 761.000 84 375 S 1141,500 34.479 S 1,031,276 (104) S 110,225 Hedron, Inc Budgeted Balance Sheet As of Dec 31, 2020 2019 2020 139 140 Sales 142 Cost of goods sold 143 Gross Profit Total Operating Exp 145 Net Operating Income 146 147 148 149 150 151 152 Assets 153 Current Assets 154 Cash 155 Accounts receivable 156 Supplies Merchandise Inventory 15B Plant and Equipment: 159 Buildings and Equipment 160 Accumulated Depreciation 161 Total assets 162 163 Liabilities and Equity 164 Accounts Payable Notes Payable 166 Capital stock 168 Ratainad eamings 169 Total liabilities and equity 5 15.000 72.590 2000 16.000 157 $ 1,050,000 525 475 5 $ 645 411 165 25 304 80,000 167 $ 5 200.000 322 311 170 K L M N O P Aug $ Sep $ Oct $ Nous Dec s 30 240 29,988 29,106 21,168 22.050 7,200 $ 6,800 $ 6,600S 4,600S 5.000 S 73,920 24.088 64,827 53,602 52 179 17.500S 16.800 1 S 14.700 1 s 12,200 $ 11,900 S 75,600 74,970 72,765 52.920 56.125 18 000 $ 17,000 $ 16,500 $ 12,000 $ 12,500 $ 28,560 29.106 21,168 22,050 19,404 17,600 16.800 14.700 12,200 11,900 136 137 Hedron, Inc. Budgeted Income Statement For Year Ending Dec 31, 2020 138 Jan 20 100.000 $ 40.000 60 000 $ 77.150" (17.150) S Feb 20 114.000 S 45.600 58 400 S 79,068 (10.668) S Mar 20 126.000 $ 50.400 75 600 $ 80,180 14 50) $ Apr 20 150.000 S 60.000 90.000 IS 83,692 5.303 5 May 20 180.000 $ 72.000 108,000 5 87,928 20.072 5 Jun 20 220.000 $ 69.000 132 000 $ 93,800" 33,200 5 Jul 20 180.000 $ 72.000 108 000 S 89,440' 18 560 S Aug 20 180.000 $ 72 000 108 000 $ 90,560 17.440 5 Sep 20 191.250 $ 76 500 114 750 S 90.903" 23.848 5 Oct 20 185.625 $ 74.250 1 11,375 S 90,171 21.204 5 Nov 20 135.000 $ 14 000 81 000 $ 83,905 12.905) 5 Dec 20 Annual Total 140.625 $ 1,902,500 56 250 S 761.000 84 375 S 1141,500 34.479 S 1,031,276 (104) S 110,225 Hedron, Inc Budgeted Balance Sheet As of Dec 31, 2020 2019 2020 139 140 Sales 142 Cost of goods sold 143 Gross Profit Total Operating Exp 145 Net Operating Income 146 147 148 149 150 151 152 Assets 153 Current Assets 154 Cash 155 Accounts receivable 156 Supplies Merchandise Inventory 15B Plant and Equipment: 159 Buildings and Equipment 160 Accumulated Depreciation 161 Total assets 162 163 Liabilities and Equity 164 Accounts Payable Notes Payable 166 Capital stock 168 Ratainad eamings 169 Total liabilities and equity 5 15.000 72.590 2000 16.000 157 $ 1,050,000 525 475 5 $ 645 411 165 25 304 80,000 167 $ 5 200.000 322 311 170