Master Budgeting

Helter Skelter Inc. is a wholesale distributor of slides. The companys balance sheet as of April 30 is as follows:

Helter Skelter Inc.
Balance Sheet
As of April 30
Assets
Cash		$9,000
Accounts Receivable		$54,000
Inventory		$30,000
PPE, net		$207,000
Total Assets		$300,000
Liabilities and Equity
Accounts Payable		$63,000
Note Payable		$14,500
Common Stock		$180,000
Retained Earnings		$42,500
Total Liabilities and Equity		$300,000

The company is in the process of preparing a budget for May and has assembled the following data:

a. Sales are budgeted at $200,000 for May. Of these sales, $60,000 will be for cash and the remainder on account with half collected in the month of the sale and the other half in the following month. All of the April 30 receivables will be collected in May.

b. Purchases of inventory are expected to total $120,000 during May, all on account. 40% of inventory purchases will be paid for in the month of the purchase and the remainder is paid in the month after. All accounts payable as of April 30^th pertain to inventory purchases made on account in April.

c. The company would like to have $25,000 in cash to start the upcoming month

d. Operating expenses consist of $72,000 of cash paid out for SG&A expenses and $2,000 in depreciation expense.

e. The entire balance of notes payable will be repaid in May along with $100 in interest

f. New equipment will be purchased for $6,500

g. Funds can borrowed from the bank in increments of $100 up to $100,000.

1. Create a schedule of expected cash collection from sales a schedule of expected cash disbursements for purchases and a cash budget for May while considering any necessary borrowings for the month.