Required: You need to prepare a comprehensive 6-month budget, including supporting schedules and a report for the period January 1, 2020 to June 30, 2020 for Hedron, Inc (& fictional company). This project must include: 1. Sales forecast and Budget. 2. Cash Receipts Budget. 3. Purchase Budget. 4. Cash Purchases Disbursements Budget. 5. Operating Expense Budget. 6. Summary Cash Budget. 7. Budgeted Income Statement. 8. Budgeted Balance Sheet. The schedules/budgets must be prepared using the Excel template provided. You may only input a hard number into a pink cell. All yellow cells must be formula based (no numbers included use appropriate cell referencing). I recommend constructing the formulas for one month and then copying the formulas over to the remaining months. Rounding is encouraged and you may ignore interest and taxes. INFORMATION FOR HEDRON, INC. BUDGET PROJECT 1. Hedron, Inc. is a company that re-sells one product, a particularly comfortable lawn chair. An overseas contractor makes the product exclusively for Hedron, so Hedron has no manufacturing-related costs. 2. As of 11/01/2019, cach lawn chair costs Hedron S4 per unit. Hedron sells cach chair for Sio per unit 3. The estimated sales (in units) are as follows: Nov 2019 11,250 Dec 2019 11,600 Jan. 2020 10,000 Feb. 2020 11,400 Mar. 2020 12.000 Apr. 2020 15,600 May 2020 18,000 June 2020 22.000 July 2020 18,000 4. Per an existing contract, the cost of each chair is scheduled to increase by 5% on March 1, 2020. In addition, because of increasing costs of plastic webbing, the cost is anticipated to increase by an additional 5% on May 1, 2020. To offset these increases, the company plans to raise the sales price to $11.25 per unit beginning May 1, 2020. The sales forecast (i.e., estimated sales in units) takes this price increase into account 5. Thirty percent of any month's sales are for cash, and the remaining 70% are on credit. Thirty percent of the credit sales are collected in the month of sale, 50% are collected in the following month, and 16% are collected in the second month after the sale. The remaining receivables are deemed uncollectible. Bad debts are written off in the month the debt is deemed uncollectible (e.g. if the sale is made in January and is not collected by the end of March, it is written off in March.) No accrual for estimated bad debts is made in the month of sale. 6. The firm's policy regarding inventory is to stock (i.e. have in ending inventory) 40% of the forecasted demand in units (i.e., estimated sales) for the next month. Hedron uses the first-in, first-out (FIFO) method in accounting for inventories. 7. Forty percent of the inventory purchases are paid for in the month of purchase and the remaining 60% are paid in the following month (i.e. all the previous month's Accounts Payable are paid off by the end of any month.) 8. Per a prior contract, a cash payment of $50,000 for equipment previously purchased is due in January. Another payment of $30,000 is due in February. Depreciation on the equipment previously purchased is included in the overhead cost detailed in item 11 below. Also, dividends of $12,000 are to be paid in March. - Monthly operating expenses consist of the following (if these are cash expenses, they are paid when incurred): Salaries and Wages $3,000 Sales Commissions 7% of sales revenue Rent $8,000 Other Variable Cash Expenses 6% of sales revenue Supplies Expense: See note (1) $2,000 Other: See note (2) $48,000 Note: 1. Hedron maintains, on hand, one month's worth of supplies. 2. Other general and administrative overhead is expected to be $48,000 per month. Of this amount, $24,000 represents depreciation and other non-cash expenses. 10. The company must maintain a minimum cash balance of $15,000. Borrowing can make up shortfalls. For simplicity, assume that the bank will only lend (and accept repayments) in $1,000 increments. Ignore interest on the loan in your calculations, but minimize the amount borrowed and pay off any loans as soon as possible. 11. Cash on hand as of December 31, 2019 is expected to be $15,000. In addition, there will be no notes payable as of this date. 12. See below the other Balance Sheet accounts with their balances as of December 31, 2019: Supplies............. ..$ 2,000 Property, Plant and Equipment.......... 1,050,000 Accumulated Depreciation........ .... 526,475 Common Stock.. 200,000 Retained Earnings.. 322,811 . Formatting Table Styles Styles Clipboard Font Alignment Number N119 E C D Hedron, Inc Sales Budget For the 6 mos ending June 20 4 5 5 7 8 Budged unit sales 9 Selling price per unit 10 Total Sales Nov '19 Dec 19 Jan 20 Feb 20 Mar20 Apr 20 May 20 June 20 6 mos total 12 Cash Sales 13 Credits 14 15 Cash Sales 16 Credit Sales 17 Totales 18 19 20 Current month AR Collections 21 1 month pho NR Collections 22 2 months por NR Collections 23 Uncollectible 24 25 26 27 28 29 30 Current month cash Sales 31 Current month AR Collections 32 1 month prior AR Collections Budget FIFO Calculation Hedron, Inc Cash Collections For the 6 mos ending June 20 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total Function Library Defined Names Formula Auditing N119 33 2 months prior AIR Colechons 34 Total cash collections 35 36 Bad Debt Expense 37 38 Desired ending inventory 39 40 41 Hedron, Inc Purchase Budget For the 6 mos ending June 20 Nov 19 Dec '19 Jan 20 Feb 20 Mar20 Apr 20 May 20 June 20 6 mos total 43 44 45 Budged unt sales 46 Add desired ending inventory 47 Total needs 48 Loss Beginning Inventory 49 Required Purchases 50 51 Cost per un 52 Purchases 53 54 Pardin Month of Purchase 55 Paid in Month after Purchase 56 57 58 59 Hedren, the Schedule of Budgeted Cash Disbursements for Merchandise Purchases For the 6 mosending June 20 Jan 20 Feb 20 Mar 20 Apr 20 61 62 63 Cash purchases 64 1 month prior A/P Colections May 20 June 20 6 mos total B D E Variable Operating Expenses: Sales Commissions, % of Revenue Other Variable Cash Expenses, % of Revenue 65 Cash disbursements for merchandise purch 66 67 68 69 70 71 Fbced Operating expenses 72 Salaries and Wages 73 Rent 74 Supplies Expense 75 Other - Overhead 76 Other - Depreciation 77 78 79 80 81 82 83 Salaries and Wages 84 Sales Commissions 85 Rent 86 Other Variable Cash Expenses 87 Supplies Expense 88 Other - Overhead 89 Other - Depreciation 90 Bad Debt Expense 91 Total operating expenses 92 Depreciation and noncash items 93 Bad Debt Expense 94 Cash disbursements for operating expenses 95 96 Equipment payment - January Hedron, Inc Operating Expense Budget For the 6 mos ending June 20 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total Insert Function AutoSum Recently Financial Logical Text Date & Lookup & Math & More Used - Time Reference Trig Functions Function Library Use in Formula Name Manager Create from Selection 8 Trace De FRemove Defined Names N119 D E H Hedron, Inc Cash Budget For the 6 mos ending June 20 Jan 20 Feb 20 Mar 20 Apr 20 May 20 June 20 6 mos total 97 Equipient payment - February 98 Dividends - March 99 Minimum Monthly Cash Budget 100 101 102 103 104 105 106 Cash balance, beginning 107 Add collections from customers 108 Total cash available 109 Less disbursements: 110 Cash disbursements for merchandise purch, 111 Cash disbursements for operating expenses 112 Equipment purchases 113 Dividends 114 Total cash disbursements 115 Excess of receipts over disbursements 116 Financing 117 Borrowing note 118 Repayments-note 119Total financing 120 Cash balance, ending 121 122 123 124 125 126 127 128 Sales, net Hedron, Inc Budgeted Income Statement For the 6 mois ending June 20 Jan 20 Feb 20 Mar20 Apr 20 May 20 June 20 Total Budget FIFO Calculation Hedron, Inc Budgeted Income Statement For the 6 mes ending June 20 Feb 20 Mar 20 Apr 20 May 20 June 20 Total + 123 124 125 126 127 Jan 20 128 Sales, net 129 Cost of goods sold 130 Gross margin 131 Total operating expenses 132 Net Income 133 134 Hedron, Inc 135 Budgeted Balance Sheet 136 6/30/2020 137 138 Assets 139 Current Assets: 140 Cash 141 Accounts receivable 142 Supplies 143 Merchandise Inventory 144 Plant and Equipment 145 Buildings and Equipment 146 Accumulated Depreciation 147 Total assets 148 149 Liabilities and Equity 150 Accounts payable 151 Capital stock 152 Retained earnings 153 Total liabilities and equity 154 Budget FIFO Calculation Insert Function AutoSum Recently Financial Logical Text Date & Lookup & Math & More Used Time Reference Trig Functions Function Library Use in Formula Name Manager Create from Selection Defined Names B43 X Box A B D G FIFO Calculation 2 3 4 5 6 Beg Inventory Beg Inventory Units Purchases - Units Purchases COGS - Units COGS Ending Ending Inventory Inventory - Units 7 8 Jan Feb Mar Apr May Jun 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Budget FIFO Calculation HEDRON BUDGET PROJECT, 2020 Cash Receipts Budget Total Cash Receipts, January: Total Cash Receipts, Jan - June: Uncollectible, January: Uncollectible, Jan - June: $104,200 $842,847 $ 3,150 $ 20,118 Purchase Budget Total Purchases, Jan-June: $391,200 Cash Budget Total Cash Disbursements, Jan-June: $799,726 Ending Cash Balance, June: $ 58,121 Budgeted Income Statement Operating Expenses, Total: Net Income, Total: $508,318 $ 56,234 Budgeted Balance Sheet Total Assets: $621,023