1. Leo Company expects its Sales in January to be $150,000 and expects Sales to grow by 15% each month.
2. All sales are on credit and it collects 60% of all sales in the month of the sale, the remaining 40% in the month after the sale.
3. The cost of goods sold is equal to 70% of sales.
4. Leo Company likes to keep an ending inventory equal to 20% of next months cost of goods sold on hand.
5. All purchases of inventory are on account, and the company pays for 70% of all purchases in the month of the purchase, 30% in the month after the purchase.
6. The company pays its sales force a commission equal to 6% of sales.
7. The company also believes that its supplies expense is equal to $5,000 plus 1% of sales.
8. Rent is $4,000 per month, Advertising is $3,000 per month, Depreciation is $3,000 per month, and Utilities are $2,500 per month.
9. The company purchased an insurance policy covering 12 months for $24,000 on January 1.
10. All selling and administrative expenses are paid in the month they are incurred except for commissions that are paid in the month after they are earned and the insurance which is paid one year in advance.
11. Leo Company purchased $25,000 of Land on January 31. Leo Company paid cash for this land.
12. Interest on long-term debt is equal to 1% of the beginning balance and is paid each month. The company must maintain a minimum balance in cash of $10,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments.
13. The company had a beginning balance sheet (as of January 1) as follows:

ASSETS:			LIAB & STOCKHOLDERS EQUITY
Current Assets			Current Liabilities
Cash	$10,000		Accounts Payable	$20,000
Accounts Receivable	$28,000		Commissions Payable	$6,000
Prepaid Insurance	0		Total Current Liabilities	$26,000
Inventory	$23,000		Long Term Debt	$60,000
Total Currents Assets	$61,000		Stockholders Equity
Property, Plant, & Equipment			Common Stock	$5,000
Land	$40,000		Retained Earnings	$40,000
Equipment	$50,000		Total Stockholders Equity	$45,000
Accumulated Depreciation	($20,000)
Total PPE	$70,000
Total Assets	$131,000		Total liab & SE	$131,000

Prepare for January, February and March:

1. Sales budget
2. Purchases budget
3. Selling & Admin Expense budget
4. Cash Budget
5. Budget/Proforma Income Statement
6. Budget/Proforma Balance Sheet