please explain how you got what you got and in this format would be super helpful, thank you!
Chapter 8 Worksheet Novak Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter: a) As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Debits Credits Cash $48,000 240,000 Accounts Receivable $224,000 Inventory $60,000 Buildings and Equipment, net $370,000 Accounts Payable $ 93,000 Common Stock $500,000 Retained Earnings $109,000 702,000 702,ouu b) Actual sales for December and budgeted sales for the next four months are as follows: M of ra December (actual) $280,000 2,000 January $400,000 1 150.00 February $600.000 240,000 March $300,000 10.000 April $200,000 90.000 (409) c) Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December sales. d) The company's gross margin is 40% of sales. (In other words, COGS is 60% of sales.) e) Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month; advertising. $70,000 per month; shipping. 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter. f) Each month's ending inventory should equal 25% of the following month's cost of goods sold. g) One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month h) During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500. i) During January, the company will declare and pay $45,000 in cash dividends. 1) Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on the loans is 1% per month (12% per year). The company would, as far as it is able, repay any loan plus accumulated interest at the end of the quarter Required: Using the data above, complete the following statements and schedules for the first quarter: February March Quarter 1. Schedule of Expected Cash Collections: January Cash Sales $ 80,000 Credit Sales $274,000 Total Cash Collections $304.000 2. a) Merchandise Purchases Budget: February $360,000 March Quarter T January Budgeted COGS $240,000 Add: Desired End, Inventory 90.000* Total Needs 330.000 Less: Beginning Inventory 60.000 Required purchases $270.000 *$400,000 sales x 60% COGS ratio - $240,000 **$360,000 x 25% - $90,000 b) Schedule of Expected Cash Disbursements: February March January $ 93,000 $135,000 Quarter $ 93,000 $270,000 $135,000 December purchases January purchases February purchases March purchases Cash Disbursements $228.000 T L 3. Cash Budget February March Quarter January $48,000 $304,000 $352,000 $228,000 $129,000 Beginning Cash Balance Add: Cash Collections Total Cash Available Less Cash Disbursements: Inventory Purchases Selling and Admin. Expenses Equipment purchases Cash Dividends Total Cash Disbursements Excess (Deficiency) of Cash Financing: Borrowings Repayments Interest Total Financing Ending Cash Balance $45,000 $402,000 ($50,000) 4. Prepare a Budgeted (Absorption Costing) Income Statement for the Quarter ending March 31. 5. Prepare a Budgeted Balance Sheet as of March 31