Master Budget Project A. Information to be used in preparation of master budget: Ryan Richards, controller for Grange Retailers, has assembled the following data to assist 1. Complete the balance sheet given in item j. 2. Prepare a cash budget for each month in the third quarter and for the quarter in total (the third quarter begins on July 1). Provide a supporting schedule of cash collections. in the preparation of a cash budget for the third quarter of 2016: a. Sales: 3. Prepare a pro-forma balance sheet as of September 30, 2016. May (actual) June (actual) July (estimated) August (estimated) September (estimated) October (estimated) $100,000 90,000 135.000 4. Provide 3 different ways in which the company may increase net income. In fulfilling this requirement, you should use as many concepts from the course as possible, identify and explain each concept used, and provide pro-forma excel spreadsheets to support your recommendations. b. Each month, 30 percent of sales are for cash and 70 percent are on credit. The c. Each month, the ending inventory exactly equals 50 percent of the cost of next d. Inventory purchases are paid for in the month following the purchase. collection pattern for credit sales is 20 percent in the month of sale, 50 percent in the following month, and 30 percent in the second month following the sale. month's sales. The markup on goods is 25 percent of cost. e. Recurring monthly expenses are as follows: Salaries and wages Depreciation on plant and equipment Utilities Other $10,000 4,000 1,000 1,700 f. Property taxes of $15,000 are due and payable on July 15, 2016 g. h. A lease on a new storage facility is scheduled to begin on September 2, 2016. Advertising fees of $6,000 must be paid on August 20, 2016. Monthly payments are $5,000 The company has a policy to maintain a minimum cash balance of S10,000. If necessary, it will borrow to meet its short-term needs. All borrowing is done at the beginning of the month. All payments on principal and interest are made at the end of a month. The annual interest rate is 9 percent. The company must borrow in multiples of $1,000 A partially completed balance sheet as of June 30, 2016, follows. (Accounts payable is for inventory purchases only.) i. j. Accounts receivable Accounts payable Common stock Retained earnings Total