Prepare the following statements and balance sheets using the information below

To prepare a master budget for January, February, and March of 2018, management gathers the following information a. The company's single product is purchased for $30 per unit and resold for $45 per unit. The expected inventory level of 5,000 units on December 31, 2017, is more than management's desired level for 2018, which is 25% of the next month's expected sales (in units). Expected sales are: January, 6,000 units; February, 8,000 units; March, 10,000 units; and April, 9,000 units b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the $525,000 accounts receivable balance at December 31, 2017, S315,000 is collected in January 2018 and the remaining $210,000 is collected in February 2018 c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the $360,000 accounts payable balance at December 31, 2017, $72,000 is paid in January 2018 and the remaining $288,000 is paid in February 2018 d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $90,000 per year e. General and administrative salaries are $144,000 per year. Maintenance expense equals $3,000 per month and is paid in cash f. Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $72,000; February, $96,000; and March, $28,800. This equipment will be depreciated using the straight-line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased. g. The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month h. The company has a contract with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans are made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $36,000 at the end of each month i. The income tax rate for the company is 40%. Income taxes on the first quarter's income will not be paid until April 15 Prepare a master budget for each of the first three months of 2018; include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar): 1. Monthly sales budgets (showing both budgeted unit sales and dollar sales) 2. Monthly merchandise purchases budgets. Check (2) Budgeted purchases: January. $90,000; February. $255,000 3. Monthly selling expense budgets 3) Budgeted selling expenses: January, $61,500; February, $79,500 . Monthly general and administrative expense budgets 5. Monthly capital expenditures budgets. 6. Monthly cash budgets Page 987 (6) Ending cash bal.: January, $182,850; February, $107,850 8. Budgeted balance sheet as of March 31, 2018. (8) Budgeted total assets at March 31, $1,346,875 General and Administrative Expense Budget January February March Total Salaries Maintenance Depreciation (Calculate below) Total Expenses Monthly Depreciation Expense Calculotions Equipment owned on 12/31/17 Purchased in Janua Purchased in Februa Purchased in March Total Februar March Total Capital Expenditures Budget anuary February March Total Equipment Purchases Land Purchase Total Budgeted Cash Collections from Customers January February March Total Total Sales Cash Sales( % Credit Sales) Cash Collections: Receivables at 21/31/17 (60%, 40%) Jan uary Credit sales (60%, 40%) February Credit sales (60%, 40%) Total from Credit customers Cash Sales Total Cash Received Budgeted Cash Payments for Purchases January February March Total Credit Purchases Accounts Payable (Beginning Balance) Accounts Payable at 12/31/17(20%, 80%) January Purchases (20%, 80%) February Purchases(20%) Total Paid on Purchases Cash Budget January February March Beginning Cash Balance Cash Receipts from Customers Total Cash Available Cash Payments: Payments for Purchases Sales Commissions Sales Salaries General & Administrative Salaries Maintenance Expense Interest Taxes Payable Purchase of Equipment Purchase of land Total Cash Payments Preliminary Balance Repayment of loan to bank Additional loan from bank Ending Cash Balance Loan balance, end of month Isle Corporation Budgeted Income Statement For the Quarter ended March 31, 2018 Budgeted Balance Sheet Isle Corporation Budgeted Balance Sheet 31-Mar-18 Assets Cash Accounts receivable nventory Cash budget Total Current Assets Land Equipment Less accumulated depreciation Capital budget Total Assets Liabilities and Equity Accounts payable Bank loan payable Taxes payable Cash Budget Income Statement Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity