Here is the rest of it$.$

the credit line, and an estimated balance of the credit line.

The Credit line has a balance at the end of December of the prior year of $$225,000$

REQUIRED:

a$)$ Prepare a Selling and Administrative Budget

b$)$ Prepare a capital expenditure budget.

c$)$ Prepare a cash budget showing total sources and uses of cash for the quarter.

d$)$ Prepare a schedule showing the line of credit for borrowings, repayments, interest etc.

$$

L$.$ C$.$ Body Boards Inc. Budgeting Project

 

A$.$ Prepare a budgeted income statement for the first quarter. $($Cost of Goods Should be calculated based on estimated costs of production for the quarter.$)$

B$.$ Prepare the Budgeted Balance Sheet for March $31,20$X$1$

The following was from the December $31$ Balance sheet.

Plant and Equipment $$6,800,000\mathrm{.}00$

Accumulated Depreciation $$1,350,000\mathrm{.}00$

Common Stock $($did not change$)$ $$1,500,000\mathrm{.}00$

Retained Earnings $$5,984,990\mathrm{.}42$

The company has a line of credit with an interest rate of $12\%.$ The company has good credit and can borrow funds on a secured basis at $4\%$ but has not done so$.$

C$.$ What recommendations would you provide to L$.$ C$.$ Body Boards Inc. about financing of the equipment purchases in March? Provide an analysis to support your position and provide the $$Why$$ to your recommended course of action. How much would the company save using your recommendation?

Check Figures

Total Sales $37,158,300\mathrm{.}00$ For quarter

Total Raw Materials Purchased $19,237,340\mathrm{.}00$ For quarter

Total Direct Labor Cost $3,060,681\mathrm{.}12$ March $20$XX

Budgeted MFG OH Cost per Unit $3\mathrm{.}616$ For quarter, this is rounded to $3$ decimal places

Ending Finished Goods Inventory $1,190,089\mathrm{.}41$ End of March $20$XX

Total S&A Expenses $2,185,206\mathrm{.}00$ For quarter

Total Financing $1,709,725\mathrm{.}28$ End of March

Net Income $3,778,851\mathrm{.}78$ For quarter

Total Assets $14,805,325\mathrm{.}41$ March $31,20$XX