Overview As part of the continued advancement of technology, a drone camera market has emerged in recent years. The drone camera market has been growing as more photography enthusiasts have begun adopted this high-tech approach to capturing still images and video using remotely controlled devices. Eager to capture a share of this growing market, CamDrone entered the market in early 2018. CamDrone manufactures camera drones, selling primarily to retailers. CamDrone is pleased with its financial performance over its first few years of operations, optimistic to achieve continued financial success. For planning and control purposes the company utilizes a monthly master budget, which is usually developed at least three months in advance of the budget year. The company has a fiscal year ending December 31. It is now Sept 15, 2019. You have been asked to prepare the Master Budget for the year ending December 31, 2020. In addition, you believe it is important to carry out a sensitivity analysis and conduct additional analyses that will help management. Assignment Requirements (total of 150pts) 1. Use the provided Excel template to prepare a monthly master budget for CamDrone for the year ending December 31, 2020, including the following schedules: Sales Budget & Schedule of Expected Cash Collections (20pts) Production Budget & Manufacturing Overhead Budget (20pts) Direct Materials Budget & Schedule of Expected Cash Disbursements (20pts) Direct Labour Budget (10pts) Ending Finished Goods Inventory Budget (10pts) Selling and Administrative Expense Budget (10pts) Cash Budget (10pts) 2. Prepare a budgeted Income Statement, budgeted Balance Sheet, and a budgeted Statement of Retained Earnings for the year ending December 31, 2020 (30pts) 3. Using data from parts 1 & 2, what recommendations, if any, would you make to this company with respect to managing its cash budget? (10pts) 4. What additional recommendations, if any, might you make to this company in order to improve its current situation? Do not necessarily constrain your answer to include only those areas dealing with budgets. (10pts) Important Notes About Preparing Your Master Budget 1. Rounding calculations: For calculation of COGS and ending Finished Goods Inventory, carry the MOH cost/unit to 4 decimal places For calculations involving Direct Materials, round all kg to 2 decimal places For calculations involving Direct Labour, round all hours to the nearest hour Round all units of product to full units (e.g. Sales, Finished Goods Inventory, Production, etc.) Aside from MOH cost/unit, round all other dollar amounts less than $100 to the nearest cent Aside from MOH cost/unit, round all other dollar amounts greater than $1,000 to the nearest dollar To round a number in excel use the formula =ROUND(value, number of decimals spots). For e.g., if I wanted to round the number 23.4567 to two decimal places, I would enter the following into excel =ROUND(23.4567,2) 2. Do not hardcode your numbers. This means you enter all the necessary budget data into the worksheet entitled DATA, and use reference to these cells and formulas to complete the other tables and schedules. When grading your project, I will randomly audit cells to see if they are properly referenced, or if data has been hardcoded. If you hardcode data, you will automatically lose 15pts on the assignment. Budget Information Based on your discussions with the various departments throughout the company, you have collected the following relevant information for preparing the budget: Sales 1. The marketing department is forecasting the following annual sales: For the year ended December 31, 2019: 7,000 units at $925 each* For the year ended December 31, 2020: 8,500 units at $925 each For the year ended December 31, 2021: 11,000 units at $925 each *Expected sales for the year ended December 31, 2019 were based on actual sales to date and budgeted sales for the duration of the year. 2. Peak months for sales generally correspond with summer weather and gift-giving holidays. History shows that January is the slowest month, with only 1% of annual sales, followed closely behind by Feb-April with 2% of annual sales for each month. Sales spike during summer months with May, June, July, and August contributing 12%, 15%, 12%, and 10% of annual sales respectively. With the back-to-school focus in September, there is a significant dip in camera drone sales to 3% of annual sales. As Christmas shopping picks up momentum, winter sales increase to 8% in October, 13% in November, and then peak at 20% in December. This pattern of sales is not expected to change in the next two years. Manufacturing Costs and Inventory 3. Each camera drones spends a total of 6.75 hours in production. 4. Due to the highly technical nature of CamDrone's manufacturing process, CamDrone's direct labour rate has averaged $36.00 per hour for 2019. This rate already includes the employer's portion of employee benefits. A new collective agreement is being negotiated, with a 3% pay increase anticipated effective January 1, 2020. 5. Each CamDrone requires 1.55kg of direct materials. During 2019, the average cost of direct materials was $61/kg. The supplier of the direct materials tends to be somewhat erratic, so CamDrone finds it necessary to maintain a direct materials inventory balance equal to 40% of the following month's production needs as a precaution against stock-outs. 6. Due to the similarity of the equipment in each of the production stages and the company's concentration on a single product, manufacturing overhead is allocated based on volume (i.e. the units produced). The variable manufacturing overhead rate for 2019 is $175/unit, consisting of: Plant & Equipment Maintenance $73 Utilities Indirect Materials 37 Other 20 $175 45 7. The fixed manufacturing overhead costs for 2019 are as follows: Supervisor's salary $181,800 Amortization of Plant & Equipment 132,000 Insurance 84,000 Training & Development 54,750 Property and Business Taxes 48,000 Other 30,000 $530,550 Amortization is calculated using the straight-line method, with no amortization calculated in the year capital assets are acquired. 8. Aside from amortization, all other manufacturing costs are expected to increase by 3% in 2020 due to inflation. 9. From previous experience, management has determined that an ending finished goods inventory equal to 25% of the next month's sales is required to efficiently meet customer demands. Collections Pattern 10. Sales are on a cash and credit basis, with 49% collected during the month of the sale, 33% the following month, and 15% the month thereafter. There are no early payment discounts for customers. Bad debt expense (amounts considered uncollectible) account for 3% of sales. 11. Based on the collection pattern described above, accounts payable as at end of business day on December 31, 2019 is projected to be $1,098,899 arising from the following estimates: Sales (November 2019) Sales (December 2019) $1,170,000 1,800,000 Payments Pattern 12. CamDrone pays for 20% of a month's purchases of direct materials in the month of purchase, 50% in the following month and the remaining 30% two months after the month of purchase. There are no early payment discounts offered by suppliers. 13. Based on the payment pattern described above, accounts payable as at end of business day on December 31, 2019 is projected to be $78,641 arising from the following estimates: Direct Material Purchases (November 2019) Direct Material Purchases (December 2019) $95,888 62,334 14. All payroll costs are paid in the period in which they are incurred. 15. The property and business taxes, paid at the beginning of July each year, apply to the following 12-month period. Any increases for inflation on property and business taxes do not take effect until the beginning of July each year. 16. Annual insurance premiums, paid at the beginning of April each year, apply to the following 12-month period. Any increases for inflation on insurance premiums do not take effect until the beginning of April each year. 17. Fixed manufacturing overhead costs are incurred evenly over the year and "cash-related" amounts are paid as incurred. 18. Selling and administrative expenses are paid in the month in which they occur. Other 19. Anticipating a significant increase in customer demand and market share over the next few years, CamDrone is planning a significant expansion involving acquiring additional manufacturing equipment for $3,000,000 cash. Half of this amount is to be paid to the equipment supplier in July 2020, with the remainder to be paid in October 2020. 20. Selling and administrative expenses are known to be a mixed cost; however, there is a lot of uncertainty about the portion that is fixed. Based prior year experience: Lowest level of monthly sales: 80 units ... Total Operating Expenses: $87,270* Highest level of monthly sales: 1,600 units ... Total Operating Expenses: $360,780* * excluding bad debts and amounts described below These expenses are expected to increase by 3% in 2020 due to inflation. 21. To secure and grow its market share, CamDrone is planning to operate pop-up" kiosks in various local retail centers during peak sales months (May-Aug, Nov-Dec) commencing Nov2019. CamDrone is budgeting $10,900 per month (including all related fees and taxes), payable at the beginning of each month, to set-up and operate these kiosks. The cost to set-up and operate pop-up kiosks will be in addition to the normal selling and administrative expenses described above and is not expected to increase during 2020. 22. Income tax expense is estimated to be 25% of net income. CamDrone makes monthly income tax installment payments of $250 and pays all outstanding income taxes (in excess of installment payments) in March of the following year. As such, any outstanding income tax balance for the year ended December 31, 2019 it will be paid in March 2020. 23. An arrangement has been made with the local bank that if CamDrone maintains a minimum balance of $50,000 in their bank account, they will be given a line of credit at a preferred rate of 3% per annum (0.25% per month). All borrowing is considered to happen on the first day of the month, repayments are on the last day of the month. All borrowings and repayments from the bank should be in multiples of $10,000 and interest must be paid at the end of each month. Interest is calculated on the balance at the beginning of the month, which includes any amounts borrowed that month. 24. CamDrone has a policy of paying dividends at the end of each quarter. The President tells you that the Board of Directors is planning on declaring dividends as follows: March 2020 June 2020 September 2020 December 2020 $125,000 175,000 325,000 325,000 Dividends are paid in the month they are declared. 25. The company is forecasting the following balances as at the end of business day on December 31, 2019: Assets Cash Accounts Receivable Inventory: Direct Materials Inventory: Finished Goods Prepaid Property and Business Taxes Prepaid Insurance Capital Assets (Net) Total Assets $100,000 1,098,899 3,591 11,640 24,000 21,000 571,800 1.830.930 Liabilities & Shareholders' Equity Accounts Payable Income Taxes Payable Capital Stock Retained Earnings Total Liabilities and Shareholders' Equity $78,641 19,700 500,000 1.232.589 $1.830.930 A B D E F G H J L N P 1 2 Cam Drone Sales Budget For the year ended December 31, 2020 3 4 5 6 7 8 9 10 11 12 13 14 Cam Drone Schedule of Expected Cash Collections For the year ended December 31, 2020 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 B D E F H I J M N 0 P 1 2 Cam Drone Production Budget For the year ended December 31, 2020 (all amounts in Units) 3 4 5 6 January Feburary March April May June July August September October November December Year 7 Expected Sales 8 Add: Desired Ending Inventory of Finished Goods 9 Total Units Needed 10 Less: Beginning Inventory of Finished Goods 11 Required Production #NAME? 910 350 1,260 (228) 1,032 12 13 14 15 16 2 17 Cam Drone Manufacturing Overhead Budget For the year ended December 31, 2020 18 January Feburary March April May June July August September October November December Year 19 20 21 Production in Units 22 Variable overhead rate per unit 23 Variable manufacturing overhead 24 Fixed manufacturing overhead: 25 Supervisor Salaries 26 Amortization of Plant & Equipment 27 Insurance 28 Training and Development 29 Property and Business Taxes 30 Other 31 Total fixed manufacturing OH 32 Total manufacturing OH 33 Less: Amortization of Plant & Equipment * 34 Less: Prepaid Insurance ** 35 Less: Prepaid Property and Business Taxes ** 36 Cash disbursements for manufacturing OH 37 38 * Amortization is a non-cash expense ** Prepaid expenses addressed as separate line items 39 in Cash Budget 40 A . D E F H J L M N 1 2 Cam Drone Direct Labour Budget For the year ended December 31, 2020 3 4 5 6 January Feburary March April May June July August September October November December Year 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 E 1 N 3 5 Total A B D CamDrone Ending Finished Goods Inventory Budget For the year ended December 31, 2020 4 5 Quantity Cost/ unit 6 Production Cost (/unit) 7 Direct Materials kg 8 Direct Labour hr 9 Manufacturing Overhead (Variable and Fixed) unit 10 Unit Product Cost 11 12 Budgeted Finished Goods Inventory 13 Ending Finished Goods Inventory (units) 14 Unit Product Costs (see above) 15 Ending Finished Goods Inventory ($) 16 17 Budgeted Cost of Goods Sold 18 Beginning Finished Goods Inventory 19 Plus: Cost of Goods Manufactured 20 Less: Ending Finished Goods Inventory 21 Budgeted Cost of Goods Sold 22 23 A B D E F H T L M N 2 CamDrone Selling and Administrative Expense Budget For the year ended December 31, 2020 3 4 5 January Feburary March April May June July August September October November December Year 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 A B D E F G I L M N 1 2 Cam Drone Cash Budget For the year ended December 31, 2020 3 January Feburary March April May June July August September October November December Year 4 5 6 Cash Balance (beginning) 7 Add: Collections from Customers 8 9 Less Cash Disbursements: 10 Direct Materials 11 Direct Labour 12 Manufacturing Overhead 13 Selling and Administrative Expenses 14 Tax Remittances 15 Tax Balances Payable 16 Prepaid Property and Business Taxes 17 Prepaid Insurance 18 Capital Asset Purchases 19 Dividend Payments 20 Total Disbursements Excess (Deficiency) of Cash Available Over 21 Disbursements 22 23 Financing: 24 Borrowing (beginning of month) 25 Interest Expense (paid monthly) 26 Repayment (end of month) 27 Total Financing 28 Cash Balance (ending) 29 30 31 Line of Credit Running Total (end of month) 32 33 34 35 A C 2 Cam Drone Budgeted Income Statement 3 For the year ended December 31, 2020 4 5 Sales 6 Less: Cost of Goods Sold 7 Gross Margin 8 Less: Selling & Administrative Expenses 9 Net Operating Income 10 Less: Interest Expense 11 Net Income Before Taxes (NIBT) 12 Less: Income Taxes (25%) 13 Net Income 14 15 Cam Drone 16 Budgeted Statement of Retained Earnings 17 For the year ended December 31, 2020 18 19 Retained Earnings (Beginning of Year) 20 Plus: Net Income 21 22 Less: Dividends Declared 23 Retained Earnings (End of Year) 24 25 Cam Drone 26 Budgeted Balance Sheet 27 December 31, 2020 28 29 Assets 30 Cash 31 Accounts Receivable 32 Inventory: Direct Materials 33 Inventory: Finished Goods 34 Prepaid Property and Business Taxes 35 Prepaid Insurance 36 Capital Assets (net) 37 Total Assets 38 Liabilities and Shareholders' Equity 39 Liabilities 40 Accounts Payable 41 Income Taxes Payable 42 Bank Loan Payable 43 Total Liabilities 44 Shareholders' Equity 45 Capital Stock 46 Retained Earnings 47 Total Shareholders' Equity 48 Total Liabilities & Shareholders' Equity 49 Overview As part of the continued advancement of technology, a drone camera market has emerged in recent years. The drone camera market has been growing as more photography enthusiasts have begun adopted this high-tech approach to capturing still images and video using remotely controlled devices. Eager to capture a share of this growing market, CamDrone entered the market in early 2018. CamDrone manufactures camera drones, selling primarily to retailers. CamDrone is pleased with its financial performance over its first few years of operations, optimistic to achieve continued financial success. For planning and control purposes the company utilizes a monthly master budget, which is usually developed at least three months in advance of the budget year. The company has a fiscal year ending December 31. It is now Sept 15, 2019. You have been asked to prepare the Master Budget for the year ending December 31, 2020. In addition, you believe it is important to carry out a sensitivity analysis and conduct additional analyses that will help management. Assignment Requirements (total of 150pts) 1. Use the provided Excel template to prepare a monthly master budget for CamDrone for the year ending December 31, 2020, including the following schedules: Sales Budget & Schedule of Expected Cash Collections (20pts) Production Budget & Manufacturing Overhead Budget (20pts) Direct Materials Budget & Schedule of Expected Cash Disbursements (20pts) Direct Labour Budget (10pts) Ending Finished Goods Inventory Budget (10pts) Selling and Administrative Expense Budget (10pts) Cash Budget (10pts) 2. Prepare a budgeted Income Statement, budgeted Balance Sheet, and a budgeted Statement of Retained Earnings for the year ending December 31, 2020 (30pts) 3. Using data from parts 1 & 2, what recommendations, if any, would you make to this company with respect to managing its cash budget? (10pts) 4. What additional recommendations, if any, might you make to this company in order to improve its current situation? Do not necessarily constrain your answer to include only those areas dealing with budgets. (10pts) Important Notes About Preparing Your Master Budget 1. Rounding calculations: For calculation of COGS and ending Finished Goods Inventory, carry the MOH cost/unit to 4 decimal places For calculations involving Direct Materials, round all kg to 2 decimal places For calculations involving Direct Labour, round all hours to the nearest hour Round all units of product to full units (e.g. Sales, Finished Goods Inventory, Production, etc.) Aside from MOH cost/unit, round all other dollar amounts less than $100 to the nearest cent Aside from MOH cost/unit, round all other dollar amounts greater than $1,000 to the nearest dollar To round a number in excel use the formula =ROUND(value, number of decimals spots). For e.g., if I wanted to round the number 23.4567 to two decimal places, I would enter the following into excel =ROUND(23.4567,2) 2. Do not hardcode your numbers. This means you enter all the necessary budget data into the worksheet entitled DATA, and use reference to these cells and formulas to complete the other tables and schedules. When grading your project, I will randomly audit cells to see if they are properly referenced, or if data has been hardcoded. If you hardcode data, you will automatically lose 15pts on the assignment. Budget Information Based on your discussions with the various departments throughout the company, you have collected the following relevant information for preparing the budget: Sales 1. The marketing department is forecasting the following annual sales: For the year ended December 31, 2019: 7,000 units at $925 each* For the year ended December 31, 2020: 8,500 units at $925 each For the year ended December 31, 2021: 11,000 units at $925 each *Expected sales for the year ended December 31, 2019 were based on actual sales to date and budgeted sales for the duration of the year. 2. Peak months for sales generally correspond with summer weather and gift-giving holidays. History shows that January is the slowest month, with only 1% of annual sales, followed closely behind by Feb-April with 2% of annual sales for each month. Sales spike during summer months with May, June, July, and August contributing 12%, 15%, 12%, and 10% of annual sales respectively. With the back-to-school focus in September, there is a significant dip in camera drone sales to 3% of annual sales. As Christmas shopping picks up momentum, winter sales increase to 8% in October, 13% in November, and then peak at 20% in December. This pattern of sales is not expected to change in the next two years. Manufacturing Costs and Inventory 3. Each camera drones spends a total of 6.75 hours in production. 4. Due to the highly technical nature of CamDrone's manufacturing process, CamDrone's direct labour rate has averaged $36.00 per hour for 2019. This rate already includes the employer's portion of employee benefits. A new collective agreement is being negotiated, with a 3% pay increase anticipated effective January 1, 2020. 5. Each CamDrone requires 1.55kg of direct materials. During 2019, the average cost of direct materials was $61/kg. The supplier of the direct materials tends to be somewhat erratic, so CamDrone finds it necessary to maintain a direct materials inventory balance equal to 40% of the following month's production needs as a precaution against stock-outs. 6. Due to the similarity of the equipment in each of the production stages and the company's concentration on a single product, manufacturing overhead is allocated based on volume (i.e. the units produced). The variable manufacturing overhead rate for 2019 is $175/unit, consisting of: Plant & Equipment Maintenance $73 Utilities Indirect Materials 37 Other 20 $175 45 7. The fixed manufacturing overhead costs for 2019 are as follows: Supervisor's salary $181,800 Amortization of Plant & Equipment 132,000 Insurance 84,000 Training & Development 54,750 Property and Business Taxes 48,000 Other 30,000 $530,550 Amortization is calculated using the straight-line method, with no amortization calculated in the year capital assets are acquired. 8. Aside from amortization, all other manufacturing costs are expected to increase by 3% in 2020 due to inflation. 9. From previous experience, management has determined that an ending finished goods inventory equal to 25% of the next month's sales is required to efficiently meet customer demands. Collections Pattern 10. Sales are on a cash and credit basis, with 49% collected during the month of the sale, 33% the following month, and 15% the month thereafter. There are no early payment discounts for customers. Bad debt expense (amounts considered uncollectible) account for 3% of sales. 11. Based on the collection pattern described above, accounts payable as at end of business day on December 31, 2019 is projected to be $1,098,899 arising from the following estimates: Sales (November 2019) Sales (December 2019) $1,170,000 1,800,000 Payments Pattern 12. CamDrone pays for 20% of a month's purchases of direct materials in the month of purchase, 50% in the following month and the remaining 30% two months after the month of purchase. There are no early payment discounts offered by suppliers. 13. Based on the payment pattern described above, accounts payable as at end of business day on December 31, 2019 is projected to be $78,641 arising from the following estimates: Direct Material Purchases (November 2019) Direct Material Purchases (December 2019) $95,888 62,334 14. All payroll costs are paid in the period in which they are incurred. 15. The property and business taxes, paid at the beginning of July each year, apply to the following 12-month period. Any increases for inflation on property and business taxes do not take effect until the beginning of July each year. 16. Annual insurance premiums, paid at the beginning of April each year, apply to the following 12-month period. Any increases for inflation on insurance premiums do not take effect until the beginning of April each year. 17. Fixed manufacturing overhead costs are incurred evenly over the year and "cash-related" amounts are paid as incurred. 18. Selling and administrative expenses are paid in the month in which they occur. Other 19. Anticipating a significant increase in customer demand and market share over the next few years, CamDrone is planning a significant expansion involving acquiring additional manufacturing equipment for $3,000,000 cash. Half of this amount is to be paid to the equipment supplier in July 2020, with the remainder to be paid in October 2020. 20. Selling and administrative expenses are known to be a mixed cost; however, there is a lot of uncertainty about the portion that is fixed. Based prior year experience: Lowest level of monthly sales: 80 units ... Total Operating Expenses: $87,270* Highest level of monthly sales: 1,600 units ... Total Operating Expenses: $360,780* * excluding bad debts and amounts described below These expenses are expected to increase by 3% in 2020 due to inflation. 21. To secure and grow its market share, CamDrone is planning to operate pop-up" kiosks in various local retail centers during peak sales months (May-Aug, Nov-Dec) commencing Nov2019. CamDrone is budgeting $10,900 per month (including all related fees and taxes), payable at the beginning of each month, to set-up and operate these kiosks. The cost to set-up and operate pop-up kiosks will be in addition to the normal selling and administrative expenses described above and is not expected to increase during 2020. 22. Income tax expense is estimated to be 25% of net income. CamDrone makes monthly income tax installment payments of $250 and pays all outstanding income taxes (in excess of installment payments) in March of the following year. As such, any outstanding income tax balance for the year ended December 31, 2019 it will be paid in March 2020. 23. An arrangement has been made with the local bank that if CamDrone maintains a minimum balance of $50,000 in their bank account, they will be given a line of credit at a preferred rate of 3% per annum (0.25% per month). All borrowing is considered to happen on the first day of the month, repayments are on the last day of the month. All borrowings and repayments from the bank should be in multiples of $10,000 and interest must be paid at the end of each month. Interest is calculated on the balance at the beginning of the month, which includes any amounts borrowed that month. 24. CamDrone has a policy of paying dividends at the end of each quarter. The President tells you that the Board of Directors is planning on declaring dividends as follows: March 2020 June 2020 September 2020 December 2020 $125,000 175,000 325,000 325,000 Dividends are paid in the month they are declared. 25. The company is forecasting the following balances as at the end of business day on December 31, 2019: Assets Cash Accounts Receivable Inventory: Direct Materials Inventory: Finished Goods Prepaid Property and Business Taxes Prepaid Insurance Capital Assets (Net) Total Assets $100,000 1,098,899 3,591 11,640 24,000 21,000 571,800 1.830.930 Liabilities & Shareholders' Equity Accounts Payable Income Taxes Payable Capital Stock Retained Earnings Total Liabilities and Shareholders' Equity $78,641 19,700 500,000 1.232.589 $1.830.930 A B D E F G H J L N P 1 2 Cam Drone Sales Budget For the year ended December 31, 2020 3 4 5 6 7 8 9 10 11 12 13 14 Cam Drone Schedule of Expected Cash Collections For the year ended December 31, 2020 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 B D E F H I J M N 0 P 1 2 Cam Drone Production Budget For the year ended December 31, 2020 (all amounts in Units) 3 4 5 6 January Feburary March April May June July August September October November December Year 7 Expected Sales 8 Add: Desired Ending Inventory of Finished Goods 9 Total Units Needed 10 Less: Beginning Inventory of Finished Goods 11 Required Production #NAME? 910 350 1,260 (228) 1,032 12 13 14 15 16 2 17 Cam Drone Manufacturing Overhead Budget For the year ended December 31, 2020 18 January Feburary March April May June July August September October November December Year 19 20 21 Production in Units 22 Variable overhead rate per unit 23 Variable manufacturing overhead 24 Fixed manufacturing overhead: 25 Supervisor Salaries 26 Amortization of Plant & Equipment 27 Insurance 28 Training and Development 29 Property and Business Taxes 30 Other 31 Total fixed manufacturing OH 32 Total manufacturing OH 33 Less: Amortization of Plant & Equipment * 34 Less: Prepaid Insurance ** 35 Less: Prepaid Property and Business Taxes ** 36 Cash disbursements for manufacturing OH 37 38 * Amortization is a non-cash expense ** Prepaid expenses addressed as separate line items 39 in Cash Budget 40 A . D E F H J L M N 1 2 Cam Drone Direct Labour Budget For the year ended December 31, 2020 3 4 5 6 January Feburary March April May June July August September October November December Year 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 E 1 N 3 5 Total A B D CamDrone Ending Finished Goods Inventory Budget For the year ended December 31, 2020 4 5 Quantity Cost/ unit 6 Production Cost (/unit) 7 Direct Materials kg 8 Direct Labour hr 9 Manufacturing Overhead (Variable and Fixed) unit 10 Unit Product Cost 11 12 Budgeted Finished Goods Inventory 13 Ending Finished Goods Inventory (units) 14 Unit Product Costs (see above) 15 Ending Finished Goods Inventory ($) 16 17 Budgeted Cost of Goods Sold 18 Beginning Finished Goods Inventory 19 Plus: Cost of Goods Manufactured 20 Less: Ending Finished Goods Inventory 21 Budgeted Cost of Goods Sold 22 23 A B D E F H T L M N 2 CamDrone Selling and Administrative Expense Budget For the year ended December 31, 2020 3 4 5 January Feburary March April May June July August September October November December Year 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 A B D E F G I L M N 1 2 Cam Drone Cash Budget For the year ended December 31, 2020 3 January Feburary March April May June July August September October November December Year 4 5 6 Cash Balance (beginning) 7 Add: Collections from Customers 8 9 Less Cash Disbursements: 10 Direct Materials 11 Direct Labour 12 Manufacturing Overhead 13 Selling and Administrative Expenses 14 Tax Remittances 15 Tax Balances Payable 16 Prepaid Property and Business Taxes 17 Prepaid Insurance 18 Capital Asset Purchases 19 Dividend Payments 20 Total Disbursements Excess (Deficiency) of Cash Available Over 21 Disbursements 22 23 Financing: 24 Borrowing (beginning of month) 25 Interest Expense (paid monthly) 26 Repayment (end of month) 27 Total Financing 28 Cash Balance (ending) 29 30 31 Line of Credit Running Total (end of month) 32 33 34 35 A C 2 Cam Drone Budgeted Income Statement 3 For the year ended December 31, 2020 4 5 Sales 6 Less: Cost of Goods Sold 7 Gross Margin 8 Less: Selling & Administrative Expenses 9 Net Operating Income 10 Less: Interest Expense 11 Net Income Before Taxes (NIBT) 12 Less: Income Taxes (25%) 13 Net Income 14 15 Cam Drone 16 Budgeted Statement of Retained Earnings 17 For the year ended December 31, 2020 18 19 Retained Earnings (Beginning of Year) 20 Plus: Net Income 21 22 Less: Dividends Declared 23 Retained Earnings (End of Year) 24 25 Cam Drone 26 Budgeted Balance Sheet 27 December 31, 2020 28 29 Assets 30 Cash 31 Accounts Receivable 32 Inventory: Direct Materials 33 Inventory: Finished Goods 34 Prepaid Property and Business Taxes 35 Prepaid Insurance 36 Capital Assets (net) 37 Total Assets 38 Liabilities and Shareholders' Equity 39 Liabilities 40 Accounts Payable 41 Income Taxes Payable 42 Bank Loan Payable 43 Total Liabilities 44 Shareholders' Equity 45 Capital Stock 46 Retained Earnings 47 Total Shareholders' Equity 48 Total Liabilities & Shareholders' Equity 49
