Little Annin Flagmakers
		Cost of Goods Sold Budget (USD)
Cost of Goods Sold (FIFO)	Units	Cost/unit	Total Cost
Beg. FG inventory
Add: Cost of Goods Mfg'd
Good Available for Sale
Less: Ending FG inventory
Cost of Good Sold
		Little Annin Flagmakers
		Selling and Administrative Expense Budget (USD)
	April	May	June	Quarter
Budgeted sales in units
Variable S&A per unit
Total Variable S&A
Total Fixed S&A
Total S&A Expense
Less: Depreciation
Cash Disbursements for S&A
		Little Annin Flagmakers
		Cash Budget (USD)
	April	May	June	Quarter
Cash Balance, Beginning:
Add: Receipts
Cash Collections
Total Cash Available
Less Disbursements:
Direct Materials
Direct Labor
Manufacturing Overhead
Selling and Administrative
Dividends
Equipment Purchases
Total Disbursements
Excess (deficiency) of cash available:
Financing:
Borrowing
Repayments
Interest
Total Financing
Cash Balance, ending:
		Little Annin Flagmakers
		Budgeted Income Statement (USD)
		Quarter Ending: June 30
Net Sales
Less: Cost of Goods Sold
Gross Margin
Less: S&A Expenses
Net Operating Income
Less: Interest Expense
Net Income
Computation of Net Sales:
Sales:
Less uncollectible amounts:
Net Sales:
			Little Annin Flagmakers
			Budgeted Balance Sheet (USD)
		Ending March 31st		Ending June 30th
Current Assets:
Cash
Accounts Receivable
Raw Materials Inventory
Finished Goods Inventory
Plant and Equipment:
Land
Buildings and Equipment
Accumulated Depreciation
Total Assets:
Liabilities:
Accounts Payable
Stockholder's Equity:
Common Stock
Retained Earnings
Total Liabilities and stockholder's equity:

Part II (10 Points): Using the data input provided in Exhibit 1 and the attached Excel sheet template, prepare LAF's master budgets in Excel. Do not hard-code numbers into the spreadsheet, except in the financing section of the cash budget. Part III (2.5 Points): Prepare a one-page business report that includes a synopsis of the case and your credit decision for LAF. Include in your report your justification for the credit decision (hint: the importance of the cash budget when determining a credit decision and the financial position and performance from Pro forma financial statements). Exhibit 1: Excel Data Input Section Input Data (USD) Other cash outflows Cash dividends paid each month Equipment purchases May Equipment purchases June US$15,000 US$47,820 US$154,600 1 2 3 4 5 6 7 8 9 10 Budgeted sales April (units) May (units) June (units) July (units) August (units) Expected 2,500 6,000 3,000 2,500 2,000 Desired ending inventory Finished Goods Raw Materials Cash (USS) 20% 40% US$30,000 Selling Price/unit US$120.00 11 Cash collection pattern Month of sale Following month Uncollectible 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Beginning account balances-Mar. 31 Cash (USS) Accounts Receivable (USS) FG inventory (@US$75/unit) FG cost per unit FG inventory (units) Raw Materials (@US$7.00/1b) Raw Materials (lb) Accounts Payable (US$) US$37,745 US$132,000 US$30,750 US$75.00 410 US$32,200 4,600 US$55,000 Cash payinents for inaterials Month of purchase Following month 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 400 Production requirements Raw material per unit (lb) Raw mat. cost per lb Direct labor hours per unit Direct labor rate per hour Variable MOHD per DL hour Fixed MOHD per month Depreciation in Fixed MOHD Land Buildings and equipment Accumulated Depreciation Common stock Retained eamings US$520,000 US$1,800,000 (US$750,000) US$500,000 US$1,247,6951 US$7.00 0.5 US$40.00 US$10 US$57,950 US$20,000 Selling & adninistrative costs Variable S&A cost per unit sold Fixed S&A cost per month Depreciation in Fixed S&A cost US$1.25 US$63,000 US$10,000