Short Answer Questions: [1] Marconi, Inc., a retailer of specialty paints, prepares a monthly master budget. Data for the September master budget are given below: A. The August 31st balance sheet: Cash $ 25,500 90,000 28,800 Accounts receivable Inventory Building and equipment (net) Accounts payable Capital stock Retained earnings $ 53,760 265,000 25,540 200,000 B. Actual sales for August and budgeted sales for September, October, and November are given below: $120,000 360,000 August September October November 200,000 180,000 C. Sales are 25 percent for cash and 75 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. D. The gross margin percentage is 60 percent of sales. The desired ending inventory is equal to 20 percent of the following month's sales. One fifth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month. E. The monthly cash operating expenses are $80,000, including the monthly depreciation expense of $7,000. F. During September, Marconi Company will purchase new office equipment for $17,000 cash. G. Dividends of $13,500 were declared and paid in September. H. The company must maintain a minimum cash balance of $25,000. A line of credit is used to maintain this balance. Borrowing will be made in increments of $1,000. All borrowing is done at the beginning of the month and repayments are made at the end of the month. The annual interest rate 12 percent, paid when the loan is repaid (ignore accrual of interest). Required: Prepare a balance sheet, income statement, and cash budget for the month of September. 4