Requirement 1. Prepare Watercooler's sales budget for April and May 2018. Round all amounts to the nearest dollar. Watercooler Office Supply Sales Budget April and May, 2018 April May 81,600 $ 80,000 | $ Total budgeted sales Requirement 2. Prepare Watercooler's inventory, purchases, and cost of goods sold budget for April and May. Watercooler Supply Company Inventory, Purchases, and Cost of Goods Sold Budget April and May, 2018 April May Cost of goods sold Plus: Desired ending merchandise inventory Total merchandise inventory required Less: Beginning merchandise inventory Budgeted Purchases Watercooler Office Supply Balance Sheet March 31, 2018 Assets Current Assets: Cash Accounts Receivable 26,000 18,000 20,000 1,500 Merchandise Inventory Prepaid Insurance Total Current Assets $ 65,500 Property, Plant, and Equipment: Equipment and Fixtures 56,000 (30,000) Less: Accumulated Depreciation 26,000 $ 91,500 Total Assets Liabilities Current Liabilities: Accounts Payable 17,000 4,800 Salaries and Commissions Payable Total Liabilities 21,800 Stockholders' Equity Current Assets. Cash Accounts Receivable 26,000 18,000 20,000 1,500 Merchandise Inventory $ 65,500 Prepaid Insurance Total Current Assets Property, Plant, and Equipment: Equipment and Fixtures Less: Accumulated Depreciation 56,000 (30,000) $ 26,000 91,500 Total Assets Liabilities Current Liabilities: Accounts Payable 17,000 4,800 Salaries and Commissions Payable Total Liabilities Stockholders' Equity $ 21,800 Common Stock, no par 17,000 52,700 Retained Earnings Total Stockholders' Equity 69,700 $ 91,500 Total Liabilities and Stockholders' Equity More Info a. oo Sales in April are expected to be $80,000. Watercooler forecasts that monthly sales will increase 2% over April sales in May. June's sales will increase by 4% over April sales. July sales will increase 20% over April sales. Watercooler maintains inventory of $10,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Monthly salaries amount to $9,000. Sales commissions equal 5% of sales for that month. Other monthly expenses are as follows: Rent: $3,200 Depreciation: $500 Insurance: $200 Income tax: $1,500