there was an error the Actual retained earnings at the end of the last year totalled $753,370" not $243,370.

1. Prepare a quarterly selling and administrative budget.

Big Banana Sport Drinks is a business that sels a specialy sponts drinks. The compary's fiscal year ends on December 31. Intormation to be used for the operating budget this coming year follows. Sales and Morchandise Purchases.Budort Information - Sales for this coming year ending December 31 in units are expected to be as follows: - Each unit is sold for $12 - Cost of goods sold is 52 percent of sales (to be used for the merchandise purchases budget). Merchandise inventory is maintained at a level equal to 20 percent of the next quater's cost of goods sold. Budgeted sales for the first quarter of the following year are 51,518,000. Orenating and interest Expenses Budaet infomation - Marsgement estimates at other costs, aside from advertising and depreciution, are fousd. - Selling and administrative cost estimates for the first puanter of the coming year are: - Salary expenses for the fourth quarter will be $25,000 higher in anticipation of tighter sales. - Advertsing expenses for each quarter will be 12% higher than the previous quater and will therefore increase throughout the year. 1/2 Capital Expenditure and Cash Budget information - The company plans to pay cash for propeny, plant, and equipment touling $75,000 at the end of the third quarter. Note: this will cause the depreciation for the fourth quater to increase by 51,450 to $46,550 - The company expects to collect 75 percent of sales in the cuarter of sale and 25 percent the cuarier following the sale. Accounts receivable at the end of last year totaled $365,000, at of which will be collected during the first quarter of this coming year. - All inventory puechases are on credt. The company erpects to pay 60 percect of inventory purchases in the quarter of purchase and 40 percent the following quarter. Accounts payable at the end of last year totaled $280.000, all of which will be paid during the frst quarter of this coming year. - The cash balance at the beginning of this coming year is expected to be $68.000 - A dividend payment of $120,000 will be paid in each quarter to the cuners of the business. - $150,000 of the long-term debt will be repaid at the end of 04. Andaeted dalance shest tnformarion - Assume 25 percent of fourth quater budgeted sales will be colectiod in tat the following year (this represents accounts receivable at the end of the fourth quarter). - Big Banana started the year with long-term dett of 5800,000 . - Expected account balances at the end of the fourth quarter ace: - Actual retained eamings at the end of the last year totated $243.370