I posted a question with Akshya

Problem 2- Developing a Master Budget for a Merchandising Organization Peyton Department Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2014. Peyton Department Store Balance Sheet March 31,2014 Assets Liabilities and Stockholder's Equity Cash...............................................$3,000 Accounts payable.......................$26,000 Accounts receivable....................25,000 Dividends payable..........................17,000 Inventory......................................30,000 Rent payable.....................................2,000 Prepaid insurance........................2,000 Stockholders' equity.......................40,000 Fixtures.........................................25,000 Total Assets..................................$85,000 equity...............$85,000 Total liabilities and Actual and forecasted sales for selected months in 2014 are as follows: Month Sales Revenue January......................................................................................................... ............................ $60,000 February......................................................................................................... ..............................50,000 March............................................................................................................ ................................40,000 April............................................................................................................... .................................50,000 May............................................................................................................... ..................................60,000 June............................................................................................................... .................................70,000 July............................................................................................................... ....................................90,000 August............................................................................................................ ..................................80,000 Monthly operating expenses are as follows: Wages and salaries......................................................................................................... ..............$25,000 Depreciation................................................................................................... .......................................100 Utilities............................................................................................................ .......................................1000 Rent............................................................................................................... .......................................2,000 Cash dividends of $17,000 are declared during the third month of each quarter and are paid during the first month of the following quarter. Operating expenses, except insurance, rent and depreciation are paid as incurred. Rent is paid during the following month. The prepaid insurance is for five more months. Cost of goods sold is equal to 50 percent of sales. Ending inventories are sufficient for 120 percent of the next month's sales. Purchases during any given month are paid in full during the following month. All sales are on account, with 50 percent collected during the month of sale, 40 percent during the next month, and 10 percent during the month thereafter. Money can be borrowed and repaid in multiples of $1000 at an interest rate of 12 percent per year. The company desires a minimum cash balance of $3000 on the first of each month. At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and as repayment is at the end of the month. Money is never repaid at the end of the month it is borrowed. Required a. Prepare a purchases budget for each month of the second quarter ending June 30, 2014. b. Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2014. Do not include borrowings. c. Prepare a cash disbursements schedules for each month of the second quarter ending June 30, 2014. Do not include repayments of borrowings. d. Prepare a cash budget for each month of the second quarter ending June 30, 2014. Include budgeted borrowings and repayments. e. Prepare an income statement for each month of the second quarter ending June 30, 2014. f. Prepare a budgeted balance sheet as of June 2014