MPQ Corporation is in the process of assembling its budget for the quarter ending March 31. Please see the following sales data:

• Sales Price = $28 per unit
• January Sales In Units = 1,650
• February Sales In Units = 1,400
• March Sales In Units = 1,550
• Budgeted sales are 30% cash and 70% credit

Accounts Receivable, December 31 is $14,000. The $14,000 represents the uncollected portion of December sales.

The company prefers inventory equal to 27% of the net months sales in units. The December 31 balance of inventory is 480 units. The cost of inventory is $12 per unit. 35% of the purchases are paid in the month of purchase and 57% are paid in the subsequent month. At December 31, the Accounts Payable balance is $6,800. The $6,800 represents the purchases unpaid in December.

Miscellaneous Expenses are paid within the month incurred. These expenses consist of the following:

• Freight - 3% of Sales
• Sales Commissions - 8% of Sales
• Lease on Factory - $3,750
• Salaries (Office) - $2,200 per month

Please review the additional data below:

• Depreciation Expense = $3,850 per month
• Income Tax Rate = 38% (Income Taxes are paid on 4/1/2019 and 12/31/2019)
• The company desires to keep a minimal $10,000 cash balance
• Cash Balance, December 31 is $9,800
• If there is a cash shortage, a loan is taken out to compensate at the end of the month. The interest on the loan is .8% per month, calculated from the beginning of the month balance on the loan. The interest must be paid each month. Please round to the nearest whole dollar.
• There is more cash than the minimum required, the additional amount is applied to paying down the debt.
• At December 31 there is not a balance on the loan.

Instructions

Prepare a master budget for each of the first three months during the calendar fiscal year. The master budget will include the following:

1. Schedule of Cash Disbursements for Selling and Administrative Expenses