The Bobcat Beverage Company, Inc.

Comprehensive Budgeting Problem

The assignment for this problem is to prepare the Bobcat Beverage Company, Inc., comprehensive budget for September 2020 and October 2020. Your budget MUST be completed in EXCEL. DO NOT share the template in Google Sheets if you do so the file cannot be uploaded to the dropbox resulting in a zero grade. The format of the Proforma Income Statement must be a contribution margin income statement. NOTE: You MUST use formulas to link the budgets and values within the budgets where possible. Failure to exploit Excel in linking and using formulas will result in a zero for this assignment.

The Bobcat Beverage Company, Inc. sells a wide variety of beverages and snack foods.

The Bobcat Beverage Co., Inc. Sales Forecast for Sept. to Nov., 2020
Sales Revenue (all Sales are on Credit)	September	October	November
	$800,000	$700,000	$800,000

Bobcat Beverage Company, Inc

Balance Sheet

As of August 31, 2020

Assets:		Liabilities:
Cash	$ 25,800	Accounts payable	$ 81,859
Accounts receivable	595,000	Sales commissions payable	59,500
Inventory	50,688	Advertising Expense Payable	__ 121,250
Prepaid Insurance	27,500	Income taxes payable	__ 22,000
Current assets	$ 698,988	Dividends payable	0
		Current liabilities	$ 284,609
Property, Plant & Equipment		Long-term debt	220,000
Land	100,000
Plant & Equipment	300,000	Stockholders' equity
Accumulated depreciation	(100,000)	Common stock	$ 89,500
		Retained earnings	404,879
Total assets	$ 998,988	Total SE & Liabilities	$ 998,988

Policies and Plans used by The Bobcat Beverage Company, Inc., in budgeting

1. All Sales are on Credit. Sales are collected 29% in the month of sale and 71% in the month following sale.

2. Cost of goods sold is budgeted to be 35% of sales.

3. The Bobcat Beverage Company, Inc. plans to end each month with inventory levels equal to 12% of the next months cost of sales.

4. The company pays for 74% of the purchases of merchandise in the month of the purchase and 26% in the following month
5. The Bobcat Beverage Company, Inc. pays a sales commission of 7.5% on all sales. The selling commission is paid in the month afterthe salesmen earn the commission.

6. The company believes that advertising expense is a mixed cost. Based on an analysis of data from previous years, they determine that the best estimate of advertising expense is 15.5% of sales plus $80,000.

7. The company pays allof its advertising expense in the month AFTER it is incurred.

8. The Bobcat Beverage Company, Inc. estimates its general and administrative expenses to be equal to 13% of budgeted sales plus $50,000. The general and administrative expenses are paid in the month in which they are incurred.

9. Depreciation is $10,000 per month on the property, plant and equipment owned on August 31, 2020 for the period of this budget.

10. On July 31, 2020, the company purchased and paid cash of $30,000 for a twelve-month policy covering the period August 1, 2020 to July 31, 2020 and recorded the cost in Prepaid Insurance.

11. On September 15, 2020, the company purchased Land for $260,000, paying cash.

12. The Bobcat Beverage Company, Inc. records interest expense and accrues interest payable at the rate of 1% per month (simple interest) based on the beginningbalance of Long-Term Debt for that month. The Bobcat Beverage Company, Inc. will pay interest in the month it is incurred.

13. The Bobcat Beverage Company must maintain a minimum cash balance of $25,000. If it must borrow any funds, it must borrow in $1,000 increments. Any excess cash will be used to pay down long-term debt. The company may either borrow funds or repay funds, but not both in the same month.

14. The Bobcat Beverage Company, Inc. records income tax expense and accrues income tax payable monthly using a 25% estimated tax rate. Income taxes are paid in the month AFTER they are incurred.

15. The company will declare a cash dividend on September 20, 2020 for $30,000. The cash dividend will be paid on October 15, 2020. No other dividends were declared or paid.

Once you have completed the budget, determine the following balances. On the template, make sure you link your answer to the appropriate cell. Failure to link to the appropriate cell will result in zero credit for that answer. Failure to complete this part of the assignment will result in a ZERO for the entire assignment, regardless if you completed the six budgets.

1. Total Cash Receipts for September and October
2. Total Inventory Purchases for September and October
3. Total Cash Payments for Inventory Purchases for September and October
4. Total Variable Selling & Administrative Costs for September and October
5. Total Fixed Selling & Administrative Costs for September and October
6. Total Cash Payments (S&A) for September and October
7. Total Cash Surplus (Deficit) for September and October
8. Total New Borrowing (Repayments) for September and October
9. The Contribution Margin for September and October
10. Total Interest Expense for September and October
11. Pre-tax Income for September and October
12. Income tax expense for September and October
13. Ending Balance of Accounts Receivable for September and October
14. Ending Balance of Inventory for September and October
15. Ending Balance of Prepaid Insurance for September and October
16. Ending Balance of Accumulated Depreciation for September and October
17. Ending Balance of Accounts Payable for September and October
18. Ending Balance of Commissions Payable for September and October
19. Ending Balance of Long-Term Debt for September and October
20. Ending Balance of Retained Earnings for September and October