Master Budget Excel Assignment; the UC Outpatient Pharmacy Company, a For Profit department off campus from the Hospital. 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: Cash Debits $ Credits Accounts Receivable Inventory Buildings & Equipment (Net of Depreciation) 29,000 159,250 33,000 550,000 Accounts Payable $ Capital Stock 112,000 461,750 Retained Earnings 197,500 $ 771,250 $ 771,250 b. Actual Sales in Dollars for December and budgeted sales for the next four months are as follows: December (Actual) $ 245,000 January 750,000 February 500,000 March April 375,000 299,500 Sales are 25% for cash and 75% 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 Cost of Sales or Cost of Inventory is 55% of sales. For example, for every dollars of sales the cost of the inventory is .55 e. Monthly expenses are budgeted as follows: salaries and wages, $75,000 per month; Advertising cost, $55000 per month; shipping, 5.6% of sales; depreciation, $19,000 per month; other expenses, 3% 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. 40% of a month's inventory purchases is paid for in the month of purchase; the other 60% is paid for in the following month at cost. h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $60,000. 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 $47,500 in cash dividends. j. The company must maintain a minimum cash balance of $20,000. 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 payment of complete repayment of total principal. Interest is computed on funds utilized for each month. The annual interest rate is 15%. (Figure interest on whole months, e.g., 1/15, 2/15) m. Assume a 15% tax on income at the end of each month that will be withheld until April 15th n. Assume a 2% discount on all cash sales o. If required, make necessary assumptions and state them in the answer document. 1. Schedule of expected cash collections Cash Sales less Cash discount Credit Sales Total Cash Collections 2. a. Inventory purchases budget January February March Quarter January February March Quarter Add desired ending inventory Total Needs Budgeted Cost of Goods Sold Less Beginning Inventory Required Purchases b. Schedule of cash disbursements for purchase December Purchases January Purchases February Purchases March Purchases Total Cash Disbursements for January February March $0 $0 $0 $0 $0 $0 3. Schedule of cash disbursements for expenses Salaries and Wages Advertising Shipping Other Expenses Total Cash disbursements for 4. Cash budget 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 Financing: Borrowing Repayments Total Financing Ending Cash Balance Loan Balance at end of the Month January February March Quarter $0 $0 14 19 19 $0 $0 $0 $0 $0 $0 Quarter January February March Quarter UC Outpatient Pharmacy Income Statement, MARCH 31 Gross sales revenue Net Sales Less: cash Discounts for early payment of credit sales Less: Cost of Sales Gross Margin SGA Net operating income Less: Interest expense Income before income taxes Less: Income Taxes (15%) Net Income Jan Feb March Quarter Assets Current Assets Property Plant & Equipment Total Assets Liabilities and Stockholders Equity Current Liabilities Stockholders equity Cash Net accounts receiveable Pharmacy Inventory Buildings and Equipment Less:Accumulated Depreciation Accounts Payable ST Line of Credit Taxes payable Interest Payable UC Outpatient Pharmacy Balance Sheet December, 31 Total current assets Total PPE Total Liabilities Total liabilities and stockholders equity Capital Stock Retained earnings Total Stockholders Equity