It's on master budget!
Master Budget Based on the following information, prepare the Master Budget for Brindle Arts for Quarter 2, 2020 $ $ Current assets as of March 31: Cash Accounts Receivable Finished Goods inventory (units) Finished Goods inventory ($s) Direct Materials inventory (kits) Direct Materials inventory ($s) Buildings and equipment, net Accounts Payable Common Stock Retained Earnings 150,000 323350 5,625 365,625 4.650 46 500 230,000 51,750 150.000 564 225 Actual and budgeted sales: March (act.) Units 5,575 Dollars $ 808375 April 6,000 870,000 May 6,500 942.500 June 6,250 906,250 July 6,100 884.500 August 5,000 725.000 $ $ $ $ $ Sales are paid as follows: 60% cash 40% credit **cash from credit sales collected month after sale Ending finished goods inv. should be 25% of the following month's budgeted sales For each unit of finished goods 3 kits of direct materials are used Direct materials cost $ 10.00 per kit Ending direct materials inv. should be 30% of next following month's production Direct materials purchase paid: 75% 25% in month of purchase month after purchase Variable costs per unit: Direct materials $ Direct labor Var. MOH$ Var. SBA per unit 30.00 25.00 10.00 14.50 Fixed costs per quarter (1/3 per month) Fixed MOH $ 600,000 (does not include depreciation) Fixed S&A $ 210.000 Depreciation $ 30,000 per month 50,000 Equipment will be purchased with cash in April I$ 160.000 and May $ Dividends will be declared and paid with cash in June $ 25,000 Minimum cash balance: $ 100,000 end of each month Borrow in $ 1.000 lincrements 1% interest, not compounding **Repay loan plus interest at the end of the quarter, if able Schedule of expected cash collections Cash Sales Credit sales Total cash collected $ $ $ April 522,000 348,000 845,350 $ $ $ May 565,500 377,000 913,500 $ $ $ June 543,750 362500 920,750 $ $ $ Quarter 2 1,631,250 1,087500 2,679,600 Bonus: (+2pt) The balance in Accounts Receivable at the end of Quarter 2 is: I $ 362,500 Production budget July April 6,000 1,625 June 6.250 August 5,000 6,100 May 6,500 1,563 8,063 Budgeted unit sales Add desired units of ending finished goods inventory Total needs Less units of beginning finished goods inventory Units of finished goods required for production 1.250 Quarter 2 18,750 4,713 23,463 (5,625) 1,525 7,775 7350 7,625 (5,625 2,000 8,063 7,775 17,838 7,350 Direct materials purchases budget April May June Quarter 2 2,000 8,063 7,775 17,838 6,000 24,188 23,325 53,513 6,615 20,869 Units of finished goods required for production Kits of raw materials needed for production Add desired units of ending direct materials inventory Total needs Less units of beginning direct materials inventory Kits of direct materials to be purchased Cost of raw materials to purchase 7,256 13,256 31,185 29,940 74,381 (4,650) (4,650) 8,606 29,940 69,731 31,185 311,850 $ 86,063 S $ 299,400 $ 697,313 Schedule of expected cash disbursements for materials purchases Purchases April May June Quarter 2 Mar purchases Apr purchases May purchases Jun purchases Total cash disbursements for purchases Bonus: (+2pt) The balance in Accounts Payable at the end of Quarter 2 is: Cash budget April May June Quarter 2 Cash Balance, beginning Add cash collections from customers Total cash available Less disbursements: Materials Purchases Direct Labor MOH exp. Selling & Administrative Exp Dividends Equipment purchases Total cash disbursements Excess deficiency of cash available over disbursements Financing Borrowing Repayments interest Total Financing Ending Cash balance Prepare a variable costing income statement for the quarter ending June 31 Prepare a variable costing income statement for the quarter ending June 31 Brindle Arts, Inc. Income Statement For Quarter Ended June 30 Sales revenue Less variable costs: Cost of goods sold Selling and admin. Total variable costs Contribution margin Less fixed costs: Manufacturing overhead Selling and admin. Total fixed costs Operating income Less interest expense Net Income lass) BONUS: (+5pt) Prepare a balance sheet as of June 30. Brindle Arts, Inc. Balance Sheet As of June 30 Assets Current Assets: Cash Accounts Receivable Inventory Total Current Assets Buildings and equipment - net Total Assets Hint: Indude both in Goods and DMS Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Stockholders' equity Common Stock Retained Earnings Total Liabilities and Stockholders' Equity
