Master Budget Based on the following information, prepare the Master Budget for Brindle Arts, Inc. for Quarter 4, 2020 Beginning of quarter balances: Cash Accounts Receivable Finished Goods Inventory (pieces of art) Raw Materials inventory (kits) Buildings and equipment Accounts Payable Common Stock Retained Earnings Actual and budgeted sales data (pieces of art): October Sept. (act.) 3,250 Artwork is sold for $200 each. 3,000 Selling price per piece of situad $ November 3,500 200 $ $ $ $ $ 150,000 260,000 300 610 350,000 50,294 150,000 52,431 December 4,500 January 2,100 February 3,300 Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at the beginning of the quarter are a result of September's credit sales. Sales: Cash 60% Credit 40% The finished goods inventory on hand at the end of each month must equal 10% of the next month's sales. of next month's sales Finished Goods inventory 10% The raw materials inventory on hand at the end of each month must equal 10% of the following month's production needs for raw materials. Raw materials inventory: 10% of next month's production needs Rawm materials needed per unit of artwork Raw materials cost: $ 32.50 per finishing kit 75% of each raw materials purchases is paid for in the month of purchase; the other 25% is paid in the following month. The accounts payable at the beginning of the quarter are the result of September raw materials purchases. Purchases: Month of 75% Month after 25% Manufacturing and Selling and Administrative costs: Variable cost per unit: Direct $ matoriale Direct labor $ Var. MOH $ Var. S&A $ 65.00 30.00 15.00 10.00 Office equipment 5,000 2 finishing kits in October Fixed costs per month: Manufacturing OH Depreciation - Manuf. Selling and Admin. Depreciation - S&A Office equipment costing $5,000 will be purchased for cash in October and new equipment will be purchased in December for $8,000. Equipment purchase $ $ $ $ 170,000 180,000 125,000 75,000 8,000 in December Management would like to maintain a minimum cash balance of at least $50,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter. Minimum cash on hand $ Borrow in $ Interest (no compounding) Use the data above, complete the following statements and schedules for the Quarter 4, 2020: Schedule of expected cash collections: Cash Sales Credit sales Total cash collected Production budget Budgeted unit sales Add desired ending finished goods inventory Total needs Less beginning finished goods inventory Required production in units Direct materials budget Required production in units of finished goods (gift baskets) Units of raw materials needed to meet production (bags of snack mix) Add desired units of ending raw materials inventory (bags of snack mix) Total units of raw materials needed (bags of snack mix) 50,000 1.000 increments 1% October October October November November November December December December Quarter January Quarter Bonus (up to 2pts) January Accounts Receivable at the end of the quarter Units of raw materials to be purchased (bags of snack mix) Cost of raw materials to be purchased (bags of snack mix) Schedule of expected cash disbursements for inventory purchases: October September purchases October purchases November purchases December purchases Total cash disbursements for purchases Direct labor budget Cash Disbursed Required production, in units Total direct labor cost Cash budget Beginning Cash balance Add cash collections Total cash available Less total cash disbursements: Purchases Direct labor Variable manufacturing OH Fixed manufacturing OH October October November November November December December December Quarter Quarter Quarter Bonus (up to 2pts) Accounts Payable at the end of the quarter Variable S&A Fixed S&A Equipment Total cash disbursements Cash available before financing Financing: Borrowings (at beginnings of quarters) Repayments Interest Total Financing Ending Cash balance Prepare an absorption costing income statement for the quarter ending December 31. 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 Het income (loss) Brindle Arts,Inc. Income Statement For Quarter Ended December 31 Prepare a balance sheet as of December 31. Brindle Arts,Inc. Balance Sheet As of December 31 Assets Current Assets: Cash Accounts Receivable Inventory Total Current Assets Buildings and equipment - net Total Assets Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Stockholders' equity: Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Bonus (up to 3pts)