To prepare a master budget for January, February, and March of 2018, management gathers the following information The companys single product is purchased for $30 per unit and resold for $45 per unit The expected inventory level of 5,000 units on December 31, 2017, is more than managements desired level for 2018, which is 25 of the next months expected sales (in units) Expected sales are January, 6,000 units February, 8,000 units March, 10,000 units and April, 9,000 units Cash sales and credit sales represent 25 and 75 , respectively, of total sales Of the credit sales, 60 is collected in the first month after the month of sale and 40 in the second month after the month of sale For the $525,000 accounts receivable balance at December 31, 2017, $315,000 is collected in January 2018 and the remaining $210,000 is collected in February 2018 Merchandise purchases are paid for as follows 20 in the first month after the month of purchase and 80 in the second month after the month of purchase For the $360,000 accounts payable balance at December 31, 2017, $72,000 is paid in January 2018 and the remaining $288,000 is paid in February 2018 Sales commissions equal to 20 of sales dollars are paid each month Sales salaries (excluding commissions) are $90,000 per year General and administrative salaries are $144,000 per year Maintenance expense equals $3,000 per month and is paid in cash Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017 It is being depreciated over eight years under the straight line method with no salvage value The following amounts for new equipment purchases are planned in the coming quarter January, $72,000 February, $96,000 and March, $28,800 This equipment will be depreciated using the straight line method over eight years with no salvage value A full months depreciation is taken for the month in which equipment is purchased The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month The company has a contract with its bank to obtain additional loans as needed The interest rate is 12 per year, and interest is paid at each month end based on the beginning balance Partial or full payments on these loans are made on the last day of the month The company has agreed to maintain a minimum ending cash balance of $36,000 at the end of each month The income tax rate for the company is 40 Income taxes on the first quarters income will not be paid until April 15 Required to fill out Prepare a master budget for each of the first three months of 2018 include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar) Monthly sales budgets (showing both budgeted unit sales and dollar sales) Monthly merchandise purchases budgets Check (2) Budgeted purchases January, $90,000 February, $255,000 Monthly selling expense budgets (3) Budgeted selling expenses January, $61,500 February, $79,500 Monthly general and administrative expense budgets Page 933 Monthly capital expenditures budgets Monthly cash budgets (6) Ending cash bal January, $182,850 February, $107,850 Budgeted income statement for the entire first quarter (not for each month) Budgeted balance sheet as of March 31, 2018 (8) Budgeted total assets at March 31, $1,346,875 Near the end of 2017, the management of Isle Corp , a merchandising company, prepared the following estimated balance sheet for December 31, 2017 ISLE CORPORATION Estimated Balance Sheet Assets Cash Accounts receivable $ 36,000 525,000 150,000 December 31, 2017 Liabilities and Equity Accounts payable $360,000 Bank loan payable 15,000 Taxes payable (due 3 15 2018) 90,000 $ 711,000 Total liabilities Common stock 472,500 Retained earnings 246,000 472,500 Total stockholders' equity $1,183,500 Total liabilities and equity Inventory Total current assets Equipment Less Accumulated depreciation Equipment, net Total assets $ 465,000 540,000 67,500 718,500 $1,183,500

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To prepare a master budget for January, February, and March of 2018, management gathers the following information. The companys single product is purchased for $30

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To prepare a master budget for January, February, and March of 2018, management gathers the following information.

The companys single product is purchased for $30 per unit and resold for $45 per unit. The expected inventory level of 5,000 units on December 31, 2017, is more than managements desired level for 2018, which is 25% of the next months expected sales (in units). Expected sales are: January, 6,000 units; February, 8,000 units; March, 10,000 units; and April, 9,000 units.
Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the $525,000 accounts receivable balance at December 31, 2017, $315,000 is collected in January 2018 and the remaining $210,000 is collected in February 2018.
Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the $360,000 accounts payable balance at December 31, 2017, $72,000 is paid in January 2018 and the remaining $288,000 is paid in February 2018.
Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $90,000 per year.
General and administrative salaries are $144,000 per year. Maintenance expense equals $3,000 per month and is paid in cash.
Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $72,000; February, $96,000; and March, $28,800. This equipment will be depreciated using the straight-line method over eight years with no salvage value. A full months depreciation is taken for the month in which equipment is purchased.
The company plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of the month.
The company has a contract with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans are made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $36,000 at the end of each month.
The income tax rate for the company is 40%. Income taxes on the first quarters income will not be paid until April 15.

Required to fill out:

Prepare a master budget for each of the first three months of 2018; include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar):

Monthly sales budgets (showing both budgeted unit sales and dollar sales).
Monthly merchandise purchases budgets.

Check (2) Budgeted purchases: January, $90,000; February, $255,000
Monthly selling expense budgets.

(3) Budgeted selling expenses: January, $61,500; February, $79,500
Monthly general and administrative expense budgets.Page 933
Monthly capital expenditures budgets.
Monthly cash budgets.

(6) Ending cash bal.: January, $182,850; February, $107,850
Budgeted income statement for the entire first quarter (not for each month).
Budgeted balance sheet as of March 31, 2018.

(8) Budgeted total assets at March 31, $1,346,875

Near the end of 2017, the management of Isle Corp., a merchandising company, prepared the following estimated balance sheet for December 31, 2017. ISLE CORPORATION Estimated Balance Sheet Assets Cash Accounts receivable $ 36,000 525,000 | 150,000 December 31, 2017 Liabilities and Equity Accounts payable $360,000 Bank loan payable 15,000 Taxes payable (due 3/15/2018) 90,000 $ 711,000 Total liabilities Common stock 472,500 Retained earnings 246,000 472,500 Total stockholders' equity $1,183,500 Total liabilities and equity Inventory Total current assets Equipment Less: Accumulated depreciation Equipment, net Total assets $ 465,000 540,000 67,500 718,500 $1,183,500