Required: Excel Formulas must be used when possible on the second answer sheet part!
Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets:

You have just been hired to work for a company that sells whimsical coffee mugs, Spot's Spot, Inc. The company has an exclusive franchise on the distribution of the coffee mugs, and sales have grown so rapidly over the last few years that it has become necessary to add new members to the management team. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are anxious to make a favorable impression on the president and have assembled the information below.
The coffee mugs are sold to retailers for $20 each. Recent and forecasted sales in units are as follows:
The large buildup in sales is due to Mother's and Father's Day, your biggest holidays of the year. Ending inventories are supposed to equal 40% of the next month's sales in units. The coffee mugs cost the company $5.60 each.
Purchases are paid for as follows: 50% in the month of purchase and the remaining 50% in the following month. All sales are on credit. 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have been negligible.
The company's monthly selling and administrative expenses are given below:
Insurance is paid on an annual basis, in November of every year. ***THINK PRE-PAID***
All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance expired. Equipment will be purchased during May for $24,000 cash, additional equipment will be purchased in June for $56,000 cash. The company declares dividends of $27,000 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below:
The company has an agreement with a bank that allows it to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month, and for simplicity, we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $66,000 in cash. PART 2 ANSWER SHEET STARTS HERE

January (actual) February (actual) March (actual) April (budget) May (budget) 23,200 29,200 43,200 68,200 103,200 June (budget) July (budget) August (budget) September (budget) 53,200 33,200 31,200 28,200 4% of sales Variable Sales commissions Fixed: Advertising Rent Salaries Utilities Insurance Depreciation $ $ $ $ 360,000 34,000 138,000 15,000 4,600 30,000 $ A budgeted income statement for the three-month period ending June 30. Use the contribution approach Budgeted Income Statement For the Three Months Ended June 30 Sales Revenue Variable expenses: Cost of goods sold Commissions Total variable expenses Contibution margin Salaries and wages = Rent Depreciation Total Fixed Expenses Not operating income Interest expense Net Income A budgeted balance sheet as of June 30 Soor's Soot Inc Budgeted Balance Sheet Assets Accounts receivable Property and equipment, net 2 Total assets Liabilities and Stockholders' Equity Accounts payable, purchases Dividends payable Loans payable, bank Common Stock Retained eamings Total liabilities and stockholders' equity A sales budget, by month and in total Spors Spot Inc Sales Budget April Budgeted sal selling price per unit A schedule of expected cash collections from sales, by month and in total Spot's Spot, Inc Schedule of Expected Cash Collections April February sales March sales May sales Total cash collections A merchandise purchases budget in units and in dollars. Show the budget by month and in total Spot's Spot, Inc Merchandise Purchases Budget April Budgeted unit sales Add: Desired ending inventory Total needs Less: Beginning inventory Required purchases in units Required deler purchases A schedule of expected cash disbursements for merchandise purchases, by month and in total Spot's Spot, Inc Budgeted Cash Disbursements for Merchandise Purchases Accounts payable April purchases May purchases lune purchases rotalashmone A cash budget Show the budget by month and in total. Some expenses do NOT apply to a cash budest Cash deficiency, repayments and interest should be indicated by a Minus sign) Spot's Spot, Inc Cash Budget For the Three Months Ending June 30 Cash balance beginning Add receipts from customers Total cash available Less cash disbursements Merchandise Purchases Salaries and wages Rent Dividends paid Land purchases Equipment purchases Depreciation rotal cash disbursements Excess deficiency of cash available over isbursements Financing Total financing