Nordic Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter.

1. As of March 31^st (the end of the prior quarter), the companys balance sheet reported the following account balances:

Cash $10,000

Accounts receivable 72,000

Inventory 54,000

Buildings and Equipment (net) 120,100

Total assets $256,100

Accounts payable $42,000

Note payable 100,000

Common stock 80,000

Retained earnings 34,100

Total liabilities and equity $256,100

2. Actual sales for March and budgeted sales for April-July are as follows:

• March (actual) $100,000
• April 120,000
• May 150,000
• June 200,000
• July 270,000

3. Sales are 20% for cash and 80% on credit. Credit sales are collected 10% in the month of sale and 90% in the month following the sale. The accounts receivable balance at March 31^st is the result of March credit sales.
4. The companys gross profit margin is 25%. (i.e., cost of goods sold is 75% of sales.)
5. Each months ending inventory should equal 60% of the following months cost of goods sold.
6. Half of a months inventory purchases are paid for in the month of purchase and half in the following month.
7. Monthly expenses are budgeted as follows: salaries and wages, $15,000 per month; shipping, 4% of sales; advertising, $2,000 per month; other expenses, 2% of sales. Depreciation expense for the second quarter is $7,500.
8. Equipment purchases during the quarter will be as follows: April, $20,000; and May and June, $0.
9. Dividends totaling $10,000 will be declared and paid in June.
10. The company wants to maintain a minimum cash balance of $10,000 each month. Additional loans are available in months of a cash deficiency. For simplicity, assume interest is 1% of the loan balance in the month of repayment.