Individual Case Study 2

Master Budget, Cash Budget and Budgeted Income Statement

After two years study at UCW, you finally graduate and start a job as Junior accountant at Glow Inc. Your manager is responsible for the nationwide distribution of creator design sets. Because of the new social media influence among current generation, the company has grown rapidly, and the prompt growth forces the management team to improve their efficiency and manage their production effectively.

You have just been given responsibility for all planning and budgeting of the entire lighting set division. Today is your first day, you have just given an assignment to prepare master budget for the manager, who needs to present the budget and discuss the financial objectives with the shareholders tomorrow. During your job interview, you clearly stated that you gained managerial accounting knowledge and hand on experience during your MBA study.

Your first assignment is to prepare a master budget for the next fiscal year, starting January 1, 2022. Your co-work has left a pile of files on your desk including the past sale records, product information, manufacture schedule and supplier pricing list. Now, you realized that you should have pay more attention during the lecture. Now, you dont know where to start. Fortunately, you remember that you still kept a copy spreadsheet of the master budget template in your laptop from the accounting course.

Note: The company desires a minimum ending cash balance each quarter on $250,000. The Glow products are sold to retailers for $75 each and the sales have been in demand due to the Covid-19. However, the marketing department has been conservative toward the end of the year due market saturation. The marketing department has just sent you their forecasted quarter sales and marketing budget. Quarter	2022 Q1	2022 Q2	2022 Q3	2022 Q4	2023 Q1	2023 Q2
Sales in Unit	25,000	26,000	25,000	26,000	29,000	30,000
Advertising Expenses	$25,000	$25,500	$26,000	$26,000	$30,000	$30,000