This assignment relates to the following Course Learning Activity:

CLR 5: Analyze financial results and plan for subsequent periods.

Using spreadsheet software create a multi-period master budget for a manufacturing company.

Activity - After reviewing Module 6 - Instructor's Notes and completing an internet search, prepare a 12-month Master Budget for a company of your choosing. It can be a company that you are closely connected to or one randomly selected.

Here is a website that provides valuable information on the preparation of a Master Budget - Please DO NOT limit your search to only this.

Components of the Budget

- https://www.principlesofaccounting.com/chapter-21/components/ (1)

Remember: As you are preparing the Master Budget, some information is NOTprovided. You are required to decide or predict or forecast this information.

Guidelines

You have 3 weeks to complete this assignment. Assignment #4 is released to you in this course's 6th week (module 6) and is due at the end of week 8 (module 8). Your facilitator will advise you of these dates and any further information.

Tasks:

1. Please provide a brief introduction to the company. The introduction should include:

• Name of company
• Location of company
• Name of owner
• Nature of the business.
• Type of product
• Fiscal period

1. For the company that you have selected - Prepare a 12-month Master Budget. Your submission must show each month's activities - example January, February, March etc.

1. Include a column and a line Total and complete calculations of them by months and by Item line.

1. Here are some considerations to include:

• You must forecast your sales, purchases, direct labour and manufacturing overhead for each month and any other information as required.
• All sales are on accounts
• Expected collections are to be 50% in the month of the sale, 30 % in the first month following the sale, and 20% in the second month following the sale.
• ProductionThe company will end each month with sufficient inventory to cover 20% of the following month's sales. The new year started with 600 units in stock and plan to finish each year with 825 units in stock.
• It pays 60% of direct materials purchase in cash in the month of purchase and the balance is due in the month following the purchase. It pays all other items above in the month incurred, except for selling and administrative expenses that include $1,000 of amortization per month.
• Cost of Goods Sold: 60% of the sale and desired ending inventory 20% of next month's sale
• Payment Pattern: 60% of purchases are paid in the month of the purchase and 40% are paid in the next month.
• Cash in Bank - January 2020 is $20,000.
• The company expected to purchase equipment in March 2020 for $10,000.
• The dividend paid per quarter is $2,000.
• Selling and administration expenses per month are $ 40,000.
• Equipment balance as of December 31, 2029, is $60,000. Accumulated depreciation - straight line; 5 years
• Common stock is $ 6,000

1. The company has access to a line of credit with the bank with the following terms - the interest rate is 1% per month on the first day of the month, and interest payable is calculated at 1% of the previous month's outstanding balance. Borrowings in a given month are taken out at the beginning of the month.

1. The company wishes to maintain a minimum balance of $10,000 at all times.