MASTER BUDGET PREPARATION

R Farm Supply is located in a small town in the rural west Data regarding the store's operations follow: Sales are budgeted at P 260,000 for Quarter 2, P 230,000 for Quarter 3, and P 210,000 for Quarter 4 Collections are expected to be 80% in the quarter of sale, 19% in the quarter following the sale, and 1% uncollectible The cost of goods sold is 65% of sales The company purchases 60% of its merchandise in the quarter prior to the quarter of sale and 40% in the quarter of sale Payment for merchandise is made in the quarter following the purchase Other quarterly expenses to be paid in cash are P 20,300 Quarterly depreciation is P 20,000 Ignore taxes

Statement of Financial Position

Quarter 1 Assets

Cash 27,000 Accounts receivable (net of allowance for uncollectible accounts) 79,000 Inventory 101,400 Property, plant and equipment (net of P 574,000 accumulated depreciation) 1,082,000 Total assets P 1,289,400

Liabilities and Stockholders' Equity Accounts payable 169,000 Common stock 740,000 Retained earnings 380,400 Total liabilities and stockholders' equity P 1,289,400

Prepare the following: Sales Budget Accounts Receivable Budget Purchase Budget Account's Payable Budget Comprehensive Cash Budget (Including Cash Collection and Cash Payments) Income Statement Balance Sheet