This practice is the development of a Master budget including sub-budgets for sales and collections, production, materials, labor and cash.

*REQUIRED* (as shown above)

1. Prepare a schedule of sales and expected cash collections

2. Prepare a material purchases budget showing material purchased and payments for the material

3. Prepare a production budget

4. Prepare a schedule of labor costs showing labor required and payment of labor

5. Prepare a Cash budget:

6. Show year end amounts for:

a. Raw material inventory

b. Finished goods inventory

c. Interest paid

d. Cash balance

7. Total amount of bad debts

Company Information Bradford Beach Inc. makes beach umbrellas. The marketing department estimates unit sales for the remainder of the year as follows: July August September 30.000 70,000 50,000 November December January of the following year February of following year 10,000 10,000 20,000 October 20,000 10,000 Other Information Selling price Collections June sales Finished goods inventory Material per umbrella Cost of material Payment for material Amount owed for material on 6/30 Ending raw material inventory Raw material ending inventory 6/30 Labor per umbrella Cost of Labor Payment for labor Ending cash balance 6/30 Ending cash balance Credit line (loan) Payment of credit line Other cash outlays $12 per umbrella 30% in month of sales 65% in the month after the sale 5% uncollectible (bad debt) $300,000 15% of following months sales 4 feet $0.80 per foot Half of payment the month it is purchased Half of payment the month after purchase $76,000 50% of following months production 7 2,000 Feet 1 hour $10 per hour In the month the labor is incurred $800,000 Must be at least $5,000 Draws must be in $5,000 increments In $1,000 increments $500,000 Dividends at the end of September 12% simple interest paid at the end of the year Interest on loan Required Required 1. Prepare a schedule of sales and expected cash collections 2. Prepare a material purchases budget showing material purchased and payments for the material 3. Prepare a production budget 4. Prepare a schedule of labor costs showing labor required and payment of labor 5. Prepare a Cash budget: 6. Show year end amounts for: a. Raw material inventory b. Finished goods inventory c. Interest paid d. Cash balance 7. Total amount of bad debts