HELP PLEASE: I HAVE WORKED ON THIS FOR HOURS!!! PLEASE FIND MY ERROR(S)!!!!!!!!!!!!!!!!!! THE SHEETS HAVE TO BE IN THE FORMAT I HAVE USED

You have developed the prototypes, established a market, and now you are putting together a budget for the first three months of 2015.The Company will actually start manufacturing and distribution on January 2, 2015.The purpose of this comprehensive budget is to formalize your expected income, cash flow and balance sheets.

You should utilize the following assumptions in making your calculations:

a.Projected sales in units are as follows: January = 500, February = 600, March = 600, April and following months = 800.At the start of each month the management plans to have 30 days, (1 month) of direct materials on hand.Each packet of direct material costs $80.00. The company will have 800 units on hand on January 1, 2015 (all purchased during December 2014).

b.Ten hours of direct labor are required to assemble each device. The direct labor cost (including fringe benefits) is $35.00 per hour.

c.Manufacturing overhead is 50% of direct labor cost.

d.Devices are sold at 100% markup on cost.

e.The company wants to have at least 50% of next months projected sales in ending finished goods inventory each month.

f.Direct materials purchases are paid for on the 10th day of the month following month of purchases.

g.Manufacturing overhead is paid 25% in cash and with the balance paid in 30 days.

h.Wages earned by employees during the first half of each month are paid on the 22nd with the remainder paid on the 7th of the following month. Assume that workforce is stable each month (hence, wages and salaries are the same every day of the month).

i.On January 1, 2015 you acquire equipment and finance it 100% through a capital lease. Life of equipment is 60 months with no salvage value. Capital lease payments are $12,000 per month including an imputed interest component. Your cost of capital is 10%. Use this rate to calculate the present value of the cash payments and the present value of the lease principal as of January 1, 2014. The first payment is due on February 1, 2015.

j.Selling commissions are 10% of sales price.These are paid on the 15th day of the month following month of sale.

k.Administrative salaries and fringe benefits are $60,000 per month payable on schedule outlined in h.

l.Rent is $8,000 per month payable on the first day of each month.

m. On January 1, 2015 the Company will pay 6 months insurance premiums in advance for a total of $24,000.

n.Other general and administrative expenses are estimated to be 15% of sales.They are paid in the month after they are incurred.

o.The company has a $500,000 line of credit secured by inventory and accounts receivable.Borrowing against this line must be in increments of $50,000.Interest is 12% per annum and is payable on the 1st day of the month following the borrowing.Assume all borrowing occur on the 15th day of the month.Repayments must also occur in $50,000 increments on the 15th day of the month.

p.All sales are on account and are collected 15% in month of sale, 75% in next month and the balance in the following month.

q.Income tax rate is 35%. Taxes accrue on each month?s income and are paid in arrears on January 15, Apr 15, Jul 15 and Oct 15 for the preceding quarter. Note: any expected losses create tax benefits that can be used in reduce taxes paid in future quarters.

r.Beginning cash balance on January 1, 2015 is projected to be $100,000 that was raised through the sale of capital stock in December 2014.

HERE IS WHAT I HAVE SO FAR:

SALES FORECAST in Units Jan 500 Feb 600 Mar 600 Apr 800 May 800 500 600 800 300 600 ### 600 600 600 800 600 800 800 800 800 800 800 RAW MATERIAL PURCHASES (packets--1 per unit) Production 300 600 EI 600 800 BI 800 600 Purchases 1,700 2,000 Purchases in $ (@$80) 136,000 160,000 800 800 800 2,400 192,000 June 800 800 800 800 2,400 PRODUCTION BUDGET Sales EI -BI Production COST OF GOODS MANUFACTURED BUDGET Production 300 600 Direct Material (@$80) 24,000 48,000 Direct Labor (10 hrs @$35/hr) 105,000 210,000 Overhead (50% DL$) 52,500 105,000 Total CGM 181,500 363,000 Average Cost/Unit 605 605 Projected Sellling Price 1,210 1,210 800 243,750 800 280,000 140,000 420,000 525 1,050 January 500 February 600 March ### Sales (@$1210) Cost of Sales (@605) Gross Margin Operating Expenses: Administrative salaries (given) Sales commissions (10% of sales) Rent (given) Insurance ($24,000 6) Other general and administrative (15% of sales) Depreciation ($564,180 60) Totals Operating Income (Loss) Inrterest Expense Capital Lease Operating Line Income (Loss) Before Taxes Estimated Income Taxes $ 605,000 302,500 302,500 $ 726,000 363,000 363,000 $ 726,000 363,000 363,000 60,000 60,500 8,000 4,000 90,750 9,413 232,663 69,837 60,000 72,600 8,000 108,900 9,413 258,913 104,087 ### ### ### ### ### ### 258,913 104,087 69,837 (20,728) 12,000 50,000 42,087 (32,234) ### ### 42,087 (32,234) Net Income (Loss) $ 49,110 $ Sales in Units 9,853 $ 9,853 Cash Forecast January Cash Receipts: Sales (from I/S) collection in month (15%) collection in 2nd month (75%) collection in 3rd month (10%) Total Cash Receipts Cash Disbursements: Direct Labor Costs Incurred (production) paid in mo (50%) paid in 2nd mo (50%) Total direct labor cash payments Administrative Salaries (Expense) paid in mo (50%) paid in 2nd mo (50%) Total adminstrative salary payments Sales commissions (Expense) paid in full in following mo Material purchases (Procurement) paid in full in following month MOH paid in month (25%) paid in 2nd mo (75%) Total MOH Other administrative costs (Expense) paid in full in following month Insurance Rent Capital Lease Principal Interest expense on capital lease (per schedule) on bank loan* Total interest Total disbursements Cash Receipts Less Cash Disbursements Beginning Balance Cash Available Borrowings Ending Cash Balance Ending Cash Balance * February March $ 605,000 45,375 226,875 30,250 $ 302,500 726,000 54,450 272,250 36,300 $ 363,000 726,000 54,450 272,250 36,300 $ 363,000 105,000 52,500 52,500 $ 157,500 $ 60,000 30,000 30,000 $ 60,000 $ 60,500 - 210,000 105,000 105,000 315,000 60,000 30,000 30,000 60,000 72,600 60,500 280,000 140,000 140,000 $ 420,000 60,000 30,000 30,000 $ 60,000 72,600 72,600 136,000 52,500 13,125 39,375 $ 52,500 90,750 $ 24,000 8,000 7,293 160,000 $ 136,000 105,000 26,250 78,750 $ 105,000 108,900 $ 90,750 8,000 7,354 192,000 $ 160,000 140,000 35,000 105,000 $ 140,000 108,900 $ 108,900 8,000 7,416 4,707 6,000 301,000 1,500 100,000 90,750 50,000 (60,250) 27,750 4,646 6,000 $ 10,646 $ 793,250 (430,250) (60,250) (490,500) 50,000 $1,273,500 $ 34,150 4,584 6,000 $ 10,584 $ 987,500 (624,500) 1,273,500 649,000 50,000 $1,662,000 $ 41,675 $ $ $ $ $ Assets Current Assets: Cash Accounts Receivable Raw Marterial Inventory Finished Goods Inventory Prepaid Insurance Total Current Assets Property and Equipment: Equipment on Capital Lease Accumulated Depreciation Net Property and Equipment January 1 January 31 $ 100,000 $ 27,750 514,250 64,000 48,000 181,500 4,000 168,000 771,500 - February 28 $ 34,150 $ 677,600 64,000 48,000 - 823,750 41,675 689,700 64,000 64,000 859,375 - 780,913 845,163 880,788 232,663 225,500 150,000 6,000 20,728 ### 412,600 ### 163,198 263,198 - Stockholders' Equity: Common Stock Retained Earnings (Deficit) Total Stockholders' Equity 9,413 9,413 12,000 9,413 21,413 168,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Wages Payable Bank Note Payable Interest Payable Income Taxes Payable Capital Lease Payable-Current Portion Total Current Liabilities Capital Lease - Amount Due After One Year - March 31 - ### ### 21,413 - $ 634,891 91,647 726,538 258,913 342,600 100,000 18,000 32,234 1,200 752,947 101,242 854,189 100,000 41,847 141,847 100,000 102,548 202,548 - - $ 868,385 $ 1,056,737 $ ### 32,234 ### 722,947 111,844 834,791 1,097,989 PV Calculation Per Month pmt 12,000 i 10.0000% 0.0083333333 n 5 60 PV $564,784.43 PPY 12 Capital Lease Amortiization Schedule 1/1/2015 2/1/2015 3/1/2015 4/1/2015 5/1/2015 6/1/2015 7/1/2015 8/1/2015 9/1/2015 10/1/2015 11/1/2015 12/1/2015 1/1/2016 2/1/2016 3/1/2016 4/1/2016 5/1/2016 6/1/2016 7/1/2016 8/1/2016 9/1/2016 10/1/2016 11/1/2016 12/1/2016 1/1/2017 2/1/2017 3/1/2017 4/1/2017 5/1/2017 6/1/2017 7/1/2017 8/1/2017 9/1/2017 10/1/2017 11/1/2017 12/1/2017 1/1/2018 2/1/2018 3/1/2018 4/1/2018 5/1/2018 6/1/2018 7/1/2018 8/1/2018 9/1/2018 10/1/2018 11/1/2018 12/1/2018 1/1/2019 2/1/2019 3/1/2019 4/1/2019 5/1/2019 6/1/2019 7/1/2019 8/1/2019 9/1/2019 10/1/2019 11/1/2019 12/1/2019 1/1/2020 PMT # 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 *rounded PMT 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Interest 4,706.54 4,645.76 4,584.47 4,522.68 4,460.37 4,397.54 4,334.18 4,270.30 4,205.89 4,140.93 4,075.44 4,009.40 3,942.82 3,875.67 3,807.97 3,739.70 3,670.87 3,601.46 3,531.47 3,460.90 3,389.74 3,317.99 3,245.64 3,172.68 3,099.12 3,024.95 2,950.16 2,874.74 2,798.70 2,722.02 2,644.70 2,566.74 2,488.13 2,408.87 2,328.94 2,248.35 2,167.09 2,085.14 2,002.52 1,919.21 1,835.20 1,750.50 1,665.08 1,578.96 1,492.12 1,404.55 1,316.26 1,227.22 1,137.45 1,046.93 955.65 863.62 770.81 677.24 582.88 487.74 391.80 295.07 197.53 99.17 Principal 7,293.46 7,354.24 7,415.53 7,477.32 7,539.63 7,602.46 7,665.82 7,729.70 7,794.11 7,859.07 7,924.56 7,990.60 8,057.18 8,124.33 8,192.03 8,260.30 8,329.13 8,398.54 8,468.53 8,539.10 8,610.26 8,682.01 8,754.36 8,827.32 8,900.88 8,975.05 9,049.84 9,125.26 9,201.30 9,277.98 9,355.30 9,433.26 9,511.87 9,591.13 9,671.06 9,751.65 9,832.91 9,914.86 9,997.48 10,080.79 10,164.80 10,249.50 10,334.92 10,421.04 10,507.88 10,595.45 10,683.74 10,772.78 10,862.55 10,953.07 11,044.35 11,136.38 11,229.19 11,322.76 11,417.12 11,512.26 11,608.20 11,704.93 11,802.47 11,900.83 Balance $564,784.43 $557,490.97 $550,136.72 $542,721.20 $535,243.87 $527,704.24 $520,101.77 $512,435.95 $504,706.25 $496,912.14 $489,053.07 $481,128.52 $473,137.92 $465,080.74 $456,956.41 $448,764.38 $440,504.08 $432,174.95 $423,776.41 $415,307.88 $406,768.78 $398,158.52 $389,476.50 $380,722.14 $371,894.83 $362,993.95 $354,018.90 $344,969.06 $335,843.80 $326,642.50 $317,364.52 $308,009.22 $298,575.97 $289,064.10 $279,472.97 $269,801.91 $260,050.26 $250,217.34 $240,302.49 $230,305.01 $220,224.22 $210,059.42 $199,809.91 $189,475.00 $179,053.96 $168,546.07 $157,950.62 $147,266.88 $136,494.10 $125,631.55 $114,678.48 $103,634.14 $92,497.75 $81,268.57 $69,945.81 $58,528.69 $47,016.43 $35,408.23 $23,703.30 $11,900.83 ($0.00) Current portion as of 31-Jan 28-Feb 30-Mar 7293 8057 8901 7354 8124 8975 7416 8192 9050 7477 8260 9125 7540 8329 9201 7602 8399 9278 7666 8469 9355 7730 8539 9433 7794 8610 9512 7859 8682 9591 7925 8754 9671 7991 8827 9752 91647 101242 111844