The gross margin is 25% of sales.

Actual and budgeted sales data:

Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are a result of March credit sales.

Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.

One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory.

Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation on new assets).

Equipment costing $1,500 will be purchased for cash in April.

Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Using the data provided above, use the Excel Template provided to prepare the following budget schedules:

Sales Budget (Merely enter the sales data provided.)

Schedule of Expected Cash Collections

Merchandise Purchases Budget

Schedule of Expected Cash Disbursements - Merchandise Purchases

Schedule of Expected Cash Disbursements - Selling and Administrative Expenses

Cash Budget

Please note that Excel formulas or functions should be used throughout the budget wherever possible, instead of entering numbers into each cell.

ENTER VALUES BELOW INTO EXCEL TEMPLATE:

Show transcribed data

Managerial Accounting - Course Project Budgeted Sales \begin{tabular}{r|r|r|r|r|} \hline March & April & May & June & July \\ \hline & & & & \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Schedule of Expected Cash Collections } \\ \hline & April & May & June & Quarter \\ \hline Cash Sales & $36,000 & & & \\ \hline Credit Sales & 20,000 & & & \\ \hline Total Collections & $56,000 & & & \\ \hline \end{tabular} \begin{tabular}{l|c|c|c|c} \multicolumn{4}{|c}{ Merchandise Purchases Budget } \\ \hline & April & May & June & Quarter \\ \hline Budgeted Cost of Goods Sold & $45,000 & & & \\ \hline add: Desired Ending Inventory & 43,200 & & & \\ \hline Total Needs & 88,200 & & & \\ \hline less: Beginning Inventory & 36,000 & & & \\ \hline Required Purchases & $52,200 & & \\ \hline \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|} \hline \multicolumn{3}{|c|}{ Schedule of Expected Cash Disbursements - Merchandise Purchaes } \\ \hline & April & May & June & \multicolumn{1}{c|}{ Quarter } \\ \hline March Purchases & $21,750 & & & $21,750 \\ \hline April Purchases & 26,100 & 26,100 & & 52,200 \\ \hline May Purchases & & & & \\ \hline June Purchases & & & & \\ \hline Total Disbursements & $ & 47,850 & & \\ \hline \hline \end{tabular} \begin{tabular}{|l|r|r|r|r|} \hline \multicolumn{2}{c}{ Cash Budget } \\ \hline & \multicolumn{1}{c|}{ April } & May & June & Quarter \\ \hline Cash Balance Beginning & $8,000 & & & \\ \hline Add: Cash Collections & 56,000 & & & \\ \hline Total Cash Available & 64,000 & & & \\ \hline & & & \\ \hline & & & \\ \hline Less Cash Disbursements & & & \\ \hline For Inventory & 47,850 & & \\ \hline For Expenses & 13,300 & & \\ \hline For Equipment & 1,500 & & \\ \hline Total Cash Disbursements & 62,650 & & \\ \hline Excess (deficiency) of Cash & 1,350 & & & \\ \hline Borrowing & & & \\ \hline Repayments & & & \\ \hline Interest Paid & & & \\ \hline Ending Cash Balance & & & \\ \hline \end{tabular} Managerial Accounting - Course Project Budgeted Sales \begin{tabular}{r|r|r|r|r|} \hline March & April & May & June & July \\ \hline & & & & \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Schedule of Expected Cash Collections } \\ \hline & April & May & June & Quarter \\ \hline Cash Sales & $36,000 & & & \\ \hline Credit Sales & 20,000 & & & \\ \hline Total Collections & $56,000 & & & \\ \hline \end{tabular} \begin{tabular}{l|c|c|c|c} \multicolumn{4}{|c}{ Merchandise Purchases Budget } \\ \hline & April & May & June & Quarter \\ \hline Budgeted Cost of Goods Sold & $45,000 & & & \\ \hline add: Desired Ending Inventory & 43,200 & & & \\ \hline Total Needs & 88,200 & & & \\ \hline less: Beginning Inventory & 36,000 & & & \\ \hline Required Purchases & $52,200 & & \\ \hline \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|} \hline \multicolumn{3}{|c|}{ Schedule of Expected Cash Disbursements - Merchandise Purchaes } \\ \hline & April & May & June & \multicolumn{1}{c|}{ Quarter } \\ \hline March Purchases & $21,750 & & & $21,750 \\ \hline April Purchases & 26,100 & 26,100 & & 52,200 \\ \hline May Purchases & & & & \\ \hline June Purchases & & & & \\ \hline Total Disbursements & $ & 47,850 & & \\ \hline \hline \end{tabular} \begin{tabular}{|l|r|r|r|r|} \hline \multicolumn{2}{c}{ Cash Budget } \\ \hline & \multicolumn{1}{c|}{ April } & May & June & Quarter \\ \hline Cash Balance Beginning & $8,000 & & & \\ \hline Add: Cash Collections & 56,000 & & & \\ \hline Total Cash Available & 64,000 & & & \\ \hline & & & \\ \hline & & & \\ \hline Less Cash Disbursements & & & \\ \hline For Inventory & 47,850 & & \\ \hline For Expenses & 13,300 & & \\ \hline For Equipment & 1,500 & & \\ \hline Total Cash Disbursements & 62,650 & & \\ \hline Excess (deficiency) of Cash & 1,350 & & & \\ \hline Borrowing & & & \\ \hline Repayments & & & \\ \hline Interest Paid & & & \\ \hline Ending Cash Balance & & & \\ \hline \end{tabular}