Tatra Treats, Inc. is a candy manufacturer that makes and distributes various chocolate and peanut butter candies. Recently the companys accountant has taken a job at a competitor. Tatra is asking you to prepare the budget for the 3rd quarter of 2020. To help, the company has provided you with a copy of the 2nd quarter budget prepared by the old accountant as well as a blank template you can use to prepare the 3rd quarter budget. Remember that the ending balance sheet in the Q2 budget is the beginning balance sheet for the Q3 budget. The company provides the following information with regards to its expected operations for Q3:

The company expects to sell 12,000 cases in July, 16,000 cases in August, 17,000 cases in September, and 20,000 cases in October. The price of a case will increase to $28. The company is going to make a better effort to collect its accounts and therefore expects to collect 70% of its receivables in the month of sale with 20% collected in the following month and 10% collected in the second month following sale. For administrative ease, assume all outstanding account receivable at the end of Q2 will be collected in the first month of Q3.

The company plans to keep 25% of next months sales in finished goods inventory. The ending finished goods inventory at the end of Q2 is budgeted to be 3,000 cases. The desired ending inventory for October is 5,000 cases.

It takes 15 pounds of chocolate and peanut butter to make a case. The company plans to have 18,000 pounds in inventory at the end of Q2. It costs the company $0.35 a pound to purchase the raw materials. The company would like to have 10% of the following months needs in ending inventory. Additionally, they plan to have 25,000 pounds of raw materials in ending inventory at the end of October. Because the company will collect it receivables quicker in Q3 it plans to pay 80% of its payables in the month of purchase with the remaining 20% being paid at the end of the next month.

The company estimates that it takes a half hour (0.50) of direct labor hours to produce one case. The company is increasing its hourly wage to $17 hour.

The companys manufacturing overhead estimates and selling administrative expense estimates are the same in Q3 as they were in Q2.

The company plans on spending $8,000 on new equipment in July, $10,000 in August, $6,000 in September, and $4,000 in October.

The company requires a minimum cash balance of $30,000 at the end of every month. The company has an open line of credit at a local bank that they can borrow from to maintain the minimum balance. It will pay back any amounts owed the following month with any excess cash over the $30,000 minimum. It will pay 1% interest on any cash payments made to the bank. Note that the company can go below $30,000 to pay the required interest.

The company pays its investors a dividend of $50,000 at the conclusion of every quarter.

t-prod u ct-amazona Course Content - ACROS004 Thurday Night Class 6 Mipadam u st-red- Tatra Traine Bug tons For the Quarter Ended June 30, 2020 July June 1.000 15.000 12.000 Sales Budget Budgeted Sales in case Selling Price per Case Percentage of selected in the month of sale Percentage of sales colected in the first month after sale Percentage of sales collected in the second month after sale Production Budget Percentage of next month's sales in ending ished goods inventory Beginning Finished Goodinventory in cases Desired ending inventory fast month water 14. 26 0.35 Direct Materials Budget Pounds of chocolate and peanut butter per case Beginning Raw Materials inventory in pounds Cost per pound of chocolate and peanut butter Percentage of next month's production needs in ending Desired ending wa s inventory is pounds fosteronth Percentage of purchases paid in the month purchased Percentage of purchases paid in the month after purchase a rter Direct Labor Budget Orect obor hours required percase Direct labor cost per hour $ 16.00 Draht Q2 Budget Manufacturing Overhead Budget Variable manufacturing overhead per direct bor hour Fixed manufacturing overhead per month Depreciation per month S $ $ 300 71.000 15.000 lear-us-east-1-profie01-xythes east-1.amazonaws.com CarCare ACED004 amur Thursday Night Club h TurTreatine Budgeting Assumption For the Quarter Ended June 30, 2020 Selling and Administrative Budget Variable selling and administrative expense per case Fixed selling and administrative expense per month Fixed selling and administrative depreciation expense per month Cat Minimum cash balance Equipment purchases Dividends paid last month of the quarter Simple interest per month 10,000 S 5000 6.000 $ $ 4,000 50.000 Draft Q2 Budget learn-us-cast-1-prod-fleet01-xythos.83.-east-1.amazonaws.com Course Content - ACF1350004 Thursday Night Class -Bb. http://learn-us-cast-1-prod- t M Reader u l Tatra Treats, Inc Balance Sheet March 31, 2020 100,000 80,000 5,000 24,000 Assets Current Assets Cash Accounts Receivable Raw Materials Finished Goods Inventory Total Current Assets Plant and Equipment Land Buildings and equipment Accumulated Depreciation Plant and Equipment, net Total Assets 209.000 789.000 27,000 27,000 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Bank Credit Total Current Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 175.000 587,000 762,000 789,000 Draft Q2 Budget ForGuarded 3000 Schedule of Expected Cash Collection Beginning out Race Budun sale 14.500 . Units of needed to production Hi Draft Q2 Budget learn-us-c - rod- 01-wythos.3. 0-.amazonaws.com Miam De Assignment Course Content - ACRO06. Thursday Night Class - Tatra Treats, Inc. For the Quarter Ended June 30, 2000 Schedule of Expected Cash Disbursements for Raw Materials 27.000 101 580$ Beginning Accounts Payable First month purchases Second month purchases Third month purchases Total Cash Disbursements 45,124 $ 128580 1125 Direct Labor Budget Required production in cases Direct labor hours per case Total direct labor hours needed Direct labor cost per hour Manufacturing Overhead Budget 15. RTS 750 Budgeted direct labore hours Variable manufacturing OH rate Variable manufacturing overhead Faxed manufacturing overhead Total manufacturing overhead Les depreciation Cash disbursements for manufacturing overhead Total manufacturing overhead Budgeted direct labor hours Predetermined overhead rate Draft Q2 MacBook Air lear-us-cast--prod-ft1-nythos - -Lama .com To Do Assaments No rm-u-cast-1-pred Course Content - ACR56004 Thursday Night Class - Tatra Treats, Inc. For the Quarter Ended June 30, 2020 e t Homework Ending Finished Goods Inventory Budget absorption costing basis) Quantity Production cost per case: Direct Materials Direct Labor Manufacturing Overhead Unit product cost Budgeted finished goods inventory Ending finished goods inventory in cases Unit product cost Ending finished goods inventory Selling and Administrative Expense Budget Budgeted unt sales Variable selling and admin expense percase Variable selling and admin expense Fixed Selling and admin expense Total seling and admin expense Less depreciation Cash disbursements for sing and admin expenses 116,000 210.000 130.000 5.000 15,000 Draft Q2 Budget learn-us-east-1-pred-fle x ythos.3.-east-1amazonaws.com Assignments Course Content - ACROSO004 Thursday Night Class tiparusa prod Cat Homewa For the Quarter Ended June 30, 2020 Cash Budget 5 100 000 $ SO 000 30.000 430 000 29,756 436.00 100.000 1.374 100 102009 128 580 254 000 103.535 125.000 72.750 Beginning Cash Balance Add: Collections from customers Total cash available Less: Cash Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Admin Expenses Equipment Purchases Dividends Total Cash Disbursements Excess deficiency of cash available Financing Borrowings at the beginning of month) Repayments at end of month Interest recorded when payments made Total Financing Ending Cash Balance 10. 06.14 32.133 621 205 (13,205) 53.406 43,205 119.799 (198) Draft Q2 Budget learn-us-east-1-prod-fleet01-wythos.33.us-east-1.amazonaws.com Course Content - ACF350004 Thursday Night Class-3. p eam-us-cast-1-prod-A.. MHE Reader Get Homework Help Tatra Treats, Inc. Income Statement For the Quarter Ended June 30, 2020 1,500,000 1,052164 Sales Less: Cost of Goods Sold Gross Margin Less: Selling and Admin Expense Net Operating income Less: Interest Expense Net Income 26.00 129,831 129,399 Schedule of Cost of Goods Sold 24,000 Beginning Finished Goods Inventory Plus: Cost of Units Produced Quantity of units produced Cost of units produced Good Available for Sale Less: Finished Goods Inventory Cost of Goods Sold 1083 250 1,107,250 55,081 1,052,169 Schedule of Retained Earnings Beginning Retained Earnings Plus: Net Income Less: Dividends Paid Ending Retained Earnings 587.000 129,399 50,000 666,399 Draft Q2 Budget Preparer Name: Tucker Hargreaves Tatra Treats, Inc. Balance Sheet June 30, 2020 54,436 213,200 6,300 55,081 Assets Current Assets Cash Accounts Receivable Raw Materials Finished Goods Inventory Total Current Assets Plant and Equipment Land Buildings and equipment Accumulated Depreciation Plant and Equipment, net Total Assets 329,017 80,00 719,000 50.000 539,000 868 017 26.618 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Bank Credit Total Current Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 26,618 175,000 666 399 841,399 868,017 Draft Q2 Budget t-prod u ct-amazona Course Content - ACROS004 Thurday Night Class 6 Mipadam u st-red- Tatra Traine Bug tons For the Quarter Ended June 30, 2020 July June 1.000 15.000 12.000 Sales Budget Budgeted Sales in case Selling Price per Case Percentage of selected in the month of sale Percentage of sales colected in the first month after sale Percentage of sales collected in the second month after sale Production Budget Percentage of next month's sales in ending ished goods inventory Beginning Finished Goodinventory in cases Desired ending inventory fast month water 14. 26 0.35 Direct Materials Budget Pounds of chocolate and peanut butter per case Beginning Raw Materials inventory in pounds Cost per pound of chocolate and peanut butter Percentage of next month's production needs in ending Desired ending wa s inventory is pounds fosteronth Percentage of purchases paid in the month purchased Percentage of purchases paid in the month after purchase a rter Direct Labor Budget Orect obor hours required percase Direct labor cost per hour $ 16.00 Draht Q2 Budget Manufacturing Overhead Budget Variable manufacturing overhead per direct bor hour Fixed manufacturing overhead per month Depreciation per month S $ $ 300 71.000 15.000 lear-us-east-1-profie01-xythes east-1.amazonaws.com CarCare ACED004 amur Thursday Night Club h TurTreatine Budgeting Assumption For the Quarter Ended June 30, 2020 Selling and Administrative Budget Variable selling and administrative expense per case Fixed selling and administrative expense per month Fixed selling and administrative depreciation expense per month Cat Minimum cash balance Equipment purchases Dividends paid last month of the quarter Simple interest per month 10,000 S 5000 6.000 $ $ 4,000 50.000 Draft Q2 Budget learn-us-cast-1-prod-fleet01-xythos.83.-east-1.amazonaws.com Course Content - ACF1350004 Thursday Night Class -Bb. http://learn-us-cast-1-prod- t M Reader u l Tatra Treats, Inc Balance Sheet March 31, 2020 100,000 80,000 5,000 24,000 Assets Current Assets Cash Accounts Receivable Raw Materials Finished Goods Inventory Total Current Assets Plant and Equipment Land Buildings and equipment Accumulated Depreciation Plant and Equipment, net Total Assets 209.000 789.000 27,000 27,000 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Bank Credit Total Current Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 175.000 587,000 762,000 789,000 Draft Q2 Budget ForGuarded 3000 Schedule of Expected Cash Collection Beginning out Race Budun sale 14.500 . Units of needed to production Hi Draft Q2 Budget learn-us-c - rod- 01-wythos.3. 0-.amazonaws.com Miam De Assignment Course Content - ACRO06. Thursday Night Class - Tatra Treats, Inc. For the Quarter Ended June 30, 2000 Schedule of Expected Cash Disbursements for Raw Materials 27.000 101 580$ Beginning Accounts Payable First month purchases Second month purchases Third month purchases Total Cash Disbursements 45,124 $ 128580 1125 Direct Labor Budget Required production in cases Direct labor hours per case Total direct labor hours needed Direct labor cost per hour Manufacturing Overhead Budget 15. RTS 750 Budgeted direct labore hours Variable manufacturing OH rate Variable manufacturing overhead Faxed manufacturing overhead Total manufacturing overhead Les depreciation Cash disbursements for manufacturing overhead Total manufacturing overhead Budgeted direct labor hours Predetermined overhead rate Draft Q2 MacBook Air lear-us-cast--prod-ft1-nythos - -Lama .com To Do Assaments No rm-u-cast-1-pred Course Content - ACR56004 Thursday Night Class - Tatra Treats, Inc. For the Quarter Ended June 30, 2020 e t Homework Ending Finished Goods Inventory Budget absorption costing basis) Quantity Production cost per case: Direct Materials Direct Labor Manufacturing Overhead Unit product cost Budgeted finished goods inventory Ending finished goods inventory in cases Unit product cost Ending finished goods inventory Selling and Administrative Expense Budget Budgeted unt sales Variable selling and admin expense percase Variable selling and admin expense Fixed Selling and admin expense Total seling and admin expense Less depreciation Cash disbursements for sing and admin expenses 116,000 210.000 130.000 5.000 15,000 Draft Q2 Budget learn-us-east-1-pred-fle x ythos.3.-east-1amazonaws.com Assignments Course Content - ACROSO004 Thursday Night Class tiparusa prod Cat Homewa For the Quarter Ended June 30, 2020 Cash Budget 5 100 000 $ SO 000 30.000 430 000 29,756 436.00 100.000 1.374 100 102009 128 580 254 000 103.535 125.000 72.750 Beginning Cash Balance Add: Collections from customers Total cash available Less: Cash Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Admin Expenses Equipment Purchases Dividends Total Cash Disbursements Excess deficiency of cash available Financing Borrowings at the beginning of month) Repayments at end of month Interest recorded when payments made Total Financing Ending Cash Balance 10. 06.14 32.133 621 205 (13,205) 53.406 43,205 119.799 (198) Draft Q2 Budget learn-us-east-1-prod-fleet01-wythos.33.us-east-1.amazonaws.com Course Content - ACF350004 Thursday Night Class-3. p eam-us-cast-1-prod-A.. MHE Reader Get Homework Help Tatra Treats, Inc. Income Statement For the Quarter Ended June 30, 2020 1,500,000 1,052164 Sales Less: Cost of Goods Sold Gross Margin Less: Selling and Admin Expense Net Operating income Less: Interest Expense Net Income 26.00 129,831 129,399 Schedule of Cost of Goods Sold 24,000 Beginning Finished Goods Inventory Plus: Cost of Units Produced Quantity of units produced Cost of units produced Good Available for Sale Less: Finished Goods Inventory Cost of Goods Sold 1083 250 1,107,250 55,081 1,052,169 Schedule of Retained Earnings Beginning Retained Earnings Plus: Net Income Less: Dividends Paid Ending Retained Earnings 587.000 129,399 50,000 666,399 Draft Q2 Budget Preparer Name: Tucker Hargreaves Tatra Treats, Inc. Balance Sheet June 30, 2020 54,436 213,200 6,300 55,081 Assets Current Assets Cash Accounts Receivable Raw Materials Finished Goods Inventory Total Current Assets Plant and Equipment Land Buildings and equipment Accumulated Depreciation Plant and Equipment, net Total Assets 329,017 80,00 719,000 50.000 539,000 868 017 26.618 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Bank Credit Total Current Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 26,618 175,000 666 399 841,399 868,017 Draft Q2 Budget