Prepare the following budgets for a retail company on a computer spreadsheet such as Excel. Follow the format of the budgets shown in chapter 9 of your textbook. Your name, student ID #, and section number should appear on each page. The budgets should be in good format meaning should have proper labels, titles and a budget should fit on one page and not have a page break in the middle.

1. Prepare a sales budget for January through May. The selling price per unit is $40.00. Use the last five digits of your student identification number to fill in the blanks on the budgeted sales in units. If your number contains a 0 use 10 instead. For example, if the last five digits in your student ID number are 14607, the budgeted sales in units would be:

MY ID CODE IS: 65690

December of the previous year 10,000

January 40,000

February 60,000

March 100,000

April 70,000

2. Prepare a purchases budget for January through March, and the first quarter in total. Assume that the company only sells one product that can be purchased at $25.00 per unit. The market for this product is very competitive and customers highly value service such as quality and on time delivery of the product. Also assume that currently it is company policy that ending inventory should equal 50% of next months projected sales.

3. Prepare a cash budget for January through March and for the first quarter in total. The company maintains a minimum cash balance of $50,000.00, and this was the balance in the cash account on January 1. Past experience shows that 30% of sales are collected in the month of the sale, and 70% in the month following the sale. Labor cost is $15 per unit sold. Other expenses include $35,000 per month for rent, $14,000 for advertising, and $16,000 per month for depreciation. All costs are paid in the current month except inventory purchases, which are paid in the month following purchase (i.e. January purchases are paid in February). The company has an open line of credit with a bank and can borrow at an annual rate of 12%. For simplification assume that all loans are made at the beginning of the month when borrowing is needed and repayments are made at the end of a month when there is enough cash to make the payment. Also, interest is only paid at the time when a repayment is made. Additionally, all loans and repayments (not the interest portion) can only be made in increments of $1000 and the company would like to pay its debts, or a portion thereof, as soon as it has enough cash to do so.

4. Prepare the Budgeted Income Statement based on the information given above.

Label this budget scenario as A.,

5. Repeat steps 2-4 for budget scenarios B and C using the following Desired Ending Inventory assumptions:

	Ending Inventory
B.	90%
C.	5%

6. Write a brief analysis of the three inventory policies and explain which policy the company should choose. Your write-up should include a discussion of the results you obtained from the analyses above and should be in the form of a one-page Memo to the President of the company (make up a name).

So far, I only know how to solve #1:

Month	January	February	March	April	May
Budgeted Unit Sales	60,000	50,000	60,000	90,000	10,000
Selling Price Per Unit	40	40	40	40	40
Sales Revenue	2400000	2000000	2400000	3600000	400000

Chapter 9 Format:

SCHEDULE 8 Hampton Freeze, Inc For the Year Ended December 31, 2017 Quarter Schedule Year 7 Beginning cash balance Add cash receipts S 425003360000 5,33900 42 500 538003900165660 5 42500 165650 $.42500 230000 480,000 740,000 520.000 1.970.000 73 900 685 650 2 012500 Collections from customers 10 Total cash available 11 Less cash disbursements 12 Direct materials 13 Direct labor 14 Manufacturing overhead 15 Seling and administrative 16 Equipment purchases 49,500 72 300 100,05079350 301,200 84,000 192,000 216,000 114,000608,000 68,000 6800 103200 76,000 344,000 107,000 143,000161,000 125 000 636 000 0,000 40,000 20,000 20,000 130,000 Dividends 18 Total cash disbursements 19 Excess (deficiency) of cash available over disbursements 20 Financing 000 8000 368 600 552 100 608 250 422 350 1949200 (94 000 136 100 165 650 263 30063300 130,000 70,000 200,000 (200,000) 200,000) Borrowings (at the beginnings of quarters) 22 Repayments (at end of the year) 23 Interest 24 Total financing 25 Ending cash balance -I (21 900) (21 130 00070000221 900(21.900 S 36.000 $ 33.900 S 165.650 S 41.408 41.400 MHSchedule 5 Schedue 6 Scheduie7 Schedule 8 Scheduie9 Scheduie 10 934 SCHEDULE 9 Hampton Freeze, Inc Budgeted Income Statement For the Year Ended December 31, 2017 Schedules 6 Sales 7 Cost of goods sold 8 Gross margin 9 Selling and administrative expenses 10 Net operating Income 11 Interest expense 12 Net Income 13 l4 Schedule B Schedule 9- Schedule 10 $ 2,000,000 1,300,000 700,000 576,000 124,000 21.900 102,100 7