1. Sales are expected to be $81,000 in January, $101,000 in February, and $106,000 in March.
2. All sales are on credit and it collects 20% of all sales in the month of the sale, the remaining 80% in the month after the sale.
3. The cost of goods sold is equal to 40% of sales.
4. The company likes to keep an ending inventory on hand equal to 15% of next months cost of goods sold.
5. All purchases of inventory are on account, and the company pays for 60% of all purchases in the month of the purchase, 40% in the month after the purchase.
6. The company pays its sales force a commission equal to 3% of sales.
7. The company also believes that its miscellaneous expense is equal to $500 plus 2% of sales.
8. Rent is $2,000 per month, Supplies are $600 per month, and Depreciation is $1,800 per month.
9. On January 1st, the company purchased an insurance policy covering 24 months for $28,800.
10. All selling and administrative expenses are paid in the month they are incurred except for commissions that are paid in the month after they are earned and the insurance which is paid two year in advance.
11. The company purchased $4,000 of Land on February 18th. They paid cash for the land.
12. Interest on long-term debt is equal to 1% of the beginning balance and is paid each month. The company must maintain a minimum balance in cash of $15,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments.
13. The company is subject to a 30% income tax rate. The company pays income taxes in the month after they are accrued (expensed).
14. The companys Board of Directors declared a cash dividend of $950 on January 4th. The dividend will be paid on February 10th.
15. The company had a beginning balance sheet (as of January 1) as follows:

Assets		Liabilities & SE
Current Assets		Current Liabilities
Cash	$16,000	Accounts Payable	$23,500
Accounts Receivable	48,000	Commissions Payable	3,400
Prepaid Insurance	0	Income Taxes Payable	9,275
Inventory	9,600	Dividends Payable	0
Total Current Assets	73,600	Total Current Liabilities	36,175
		Long-term Debt	80,000
Property, Plant & Equipment
Equipment	95,000	Stockholders Equity
Land	8,800	Common Stock	26,225
Accumulated Depreciation	(25,000)	Return Earnings	10,000
Net PPE	78,800	Total SE	36,225
Total Assets	$152,400	Total Liabilities & SE	$152,400

Babcats Company's partically completed master budget is as follows:

Sales Budget

	January	February	March
Credit Sales	$81,000	$101,000	$106,000
Cash Receipts from Customers
From Current Month Credit Sales
From Prior Month Credit Sales
Total Cash Receipts from Customers	(1) (Click to select) $64,200 $48,000 $16,200 $85,000

Inventory Purchases Budget

	January	February	March
COGS		$40,400	$42,400
Desired Ending Inventory
Total INventory Needed
Beginning Inventory
Inventory Purchases	(2) (Click to select) $28,860 $40,700 $37,950 $48,060
Cash Payments for Inventory Purchases
For Current Month Purchases
For Prior Month Purchases
Total Cash Payments for Inventory Purchases	$40,816	(3) (Click to select) $40,700 $35,964 $40,816 $24,420

Selling & Administrative Expenses Budget

	January	February
Variable Selling & Administrative Expenses
Commissions	(4) (Click to select) $2,430 $3,030 $5,460 $4,050
Miscellaneous
Total Variable S&A Expenses	4,050	5,050
Fixed Selling & Administrative Expenses
Miscellaneous
Rent	2,000	2,000
Supplies
Depreciation	1,800	1,800
Insurance	(5) (Click to select) $2,400 $28,800 $0 $1,200
Total Fixed S&A Expenses	$6,100	$6,100
Cash Payments for S&A Expenses
Commissions
Utilities
Advertising
Salaries
Depreciation	(6) (Click to select) $0 $3,600 $25,000 $1,800
Insurance		(7) $28,800 $0 $2,400 $1,200
Total Cash Payments for S&A Expenses	$36,920	$7,550

Cash Budget

	January	February
Beginning Cash Balance
Cash Receipts from Customers
Total Cash Available	80,200
Cash Payments
For Inventory Purchases	40,816
For S&A Expenses
For Interest	(8) (Click to select) $1,830 $1,030 $800 $8,000
For Income Taxes
For Land Purchase
For Dividends
Total Cash Payments	87,811
Surplus (Deficit)	(9) (Click to select) $39,600 $7,611 $-7,611 $-11,611	39,600
Borrowing (Repayment)		(10) (Click to select) $23,000 $-24,600 $24,600 $-39,600
Ending Cash Balance		$ 15,000

Income Statement

	January	February
Sales	$81,000	$101,000
Less: Variable Expenses
COGS
Variable S&A Expenses
Contrinbution Margin		(11) (Click to select) $55,550 $44,550 $101,000 $33,894
Less: Fixed Expenses
Fixed S&A Expenses
Interest Expense
Pre-tax Net Income
Income Taxes Expense	11,295	14,526
After-tax Net Income	$26,355	$33,894

Balance Sheet

Assets			Liabilities & SE
Current Assets			Current Liabilities
Cash		(12) (Click to select) $15,389 $0 $15,000 $16,000	Accounts Payable		(18) (Click to select) $24,420 $11,544 $16,960 $16,280
Accounts Receivable		(13) (Click to select) $64,800 $48,000 $80,800 $84,800	Commissions Payable	(19) (Click to select) $5,830 $3,030 $2,430 $3,400
Prepaid Insurance	(14) (Click to select) $26,400 $28,800 $0 $27,600		Income Taxes Payable
Inventory		(15) (Click to select) $6,060 $40,700 $9,600 $6,360	Dividends Payable	(20) (Click to select) $0 $1,900 $800 $950
Total Current Assets			Total Current Liabilities
			Long-term Debt	(21) (Click to select) $103,000 $78,400 $80,000 $102,000
Property, Plant & Equipment
Equipment	95,000	95,000	Stockholders Equity
Land		(16) (Click to select) $0 $12,800 $4,000 $8,800	Common Stock	26,225	26,225
Accumulated Depreciation	(17) (Click to select) $-28,600 $-1,800 $-26,800 $-23,200		Return Earnings		(22) (Click to select) $59,299 $69,299 $70,249 $35,405
Net PPE			Total SE
Total Assets	$190,849	$207,760	Total Liabilities & SE	$190,849	$207,760