Master Budget Excel Assignment; Hillard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's General Ledger shows: Debits Credits Cash $50,000 Accounts Receivable 217,000 Inventory 60,000 Buildings & Equipment (Net of Depreciation) 300,000 Accounts Payable $80,000 Capital Stock 430,000 Retained Earnings 117,000 $627,000 $627,000 b. Actual Sales for December and budgeted sales for the next four months are as follows: December (Actual) $310,000 January 500,000 February 630,000 March 345,000 April 240,000 c. Sales are 30% for cash and 70% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross profit rate is 35% of sales. e. Monthly expenses are budgeted as follows: salaries and wages, $35,000 per month; advertising, $55,000 per month; shipping, 7.5% of sales; depreciation, $15,000 per month; other expenses, 5% of sales. f. At the end of each month, inventory is to be on hand equal to 20% of the following month's sales needs, stated at cost. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. h. During February, the company will purchase a new copy machine for $2,000 cash. During March, other equipment will be purchased for cash at a cost of $50,000. Depreciation expense on assets purchased during the first six months of the year half will begin being depreciated at the second half of the year. i. During January, the company will declare and pay $45,000 in cash dividends. j. The company must maintain a minimum cash balance of $25,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month, and all repayments are made at the end of a month. Borrowings and repayments of principal must be in multiples of $1,000. Interest is paid only at the time of complete repayment of total principal. Interest is computed on funds utilized for each month. The annual interest rate is 12%. (Figure interest on whole months, e.g., 1/12, 2/12) i. If required, make necessary assumptions and state them in the answer document. Required Using this data, complete the following budgets & statements for the first quarter: 1 Schedule of expected cash collections: January February March Quarter Cash Sales $150,000 $189,000 $103,500 $442,500 Credit Sales 350,000 $441,000 $241,500 1,032,500 Total Cash Collections $500,000 $630,000 $345,000 $1,475,000 2 a. Inventory Purchases budget: January February March Quarter * Budgeted Cost of Goods Sold ^ Add desired ending inventory Total Needs Less Beginning Inventory Required Purchases * ^ b. Schedule of cash disbursements for purchase: January February March Quarter December Purchases January Purchases ($270,000) February Purchases March Purchases Total Cash Disbursements for purchase 3 Schedule of cash disbursements for expenses: January February March Quarter Salaries and Wages Advertising Shipping Other Expenses Total Cash disbursements for operating expenses 4 Cash Budget: January February March Quarter Cash Balance, Beginning Add Cash collections Total Cash Available Less Disbursements: Purchases of inventory Operating Expenses Purchases of equipment Cash Dividends Total Disbursements Excess (deficiency) of cash available over disbursements Financing: Borrowing Repayments Interest Total Financing Ending Cash Balance 5 Prepare an income statement for the quarter ending March 31 as shown in this chapter. (Do an Income statement for Jan., Feb., March, and full quarter) 6 Prepare a balance sheet as of March 31.