(USE THIS INFO TO MAKE MASTER BUDGET)

The information given below is the Patriots Companys beginning balance sheet, estimates and policies, and the partially completed Master Budget for March and April. Use the information to answer the following 22 Multiple Choice Questions, each asking for a missing number from the Master Budget. Each question is worth 4 points for a total of 88 points on this exam. Patriots Company Balance Sheet As of February 28, 2019 ASSETS LIABILITIES & STOCKHOLDERS EQUITY Current Assets Current Liabilities Cash $ 5,000 Accounts Payable $ 11,000 Accounts Receivable 15,000 Commissions Payable 6,000 Prepaid Insurance - Dividends Payable - Inventory 1,600 Total Current Liabilities 17,000 Total Current Assets 21,600 Long-term debt 70,000 Property Plant & Equipment Land 60,400 Stockholders' Equity Equipment 85,000 Common Stock 45,000 Accumulated Depreciation (22,000) Retained Earnings 13,000 Net PP & E 123,400 Total Stockholders Equity 58,000 Total Assets $ 145,000 Total Liabilities & SE $ 145,000 1. Expected sales are $50,000, $64,000, and $72,000, respectively in March, April, and May. All sales are on credit. 2. The company collects 60% of sales in the month of the sale and 40% in the month after the sale. 3. The cost of goods sold is equal to 55% of sales. 4. The company desires an ending inventory equal to 20% of the next months cost of goods sold. 5. All purchases of inventory are on credit. The company pays for 70% of its purchases in the month of the purchase and 30% in the month after the purchase. 6. The company pays a 3% sales commission to its sales staff that is paid in the month after it is earned. 7. The company also incurs a utilities expense that is equal to $300 plus 1% of sales. This expense is paid in the month it is incurred. 8. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $1,100 per month, Salaries $1,400 per month and Depreciation $900 per month. 9. On March 1 the company purchased an insurance policy covering 24 months for $12,000. 10. The company pays interest on its long-term debt at the end of each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month. 11. On March 15 the company will purchase Land for $5,000, paying cash. 12. On March 27 the company will declare a $2,000 cash dividend that is to be paid on April 15. 13. The company requires a minimum cash balance of $5,000. If they must borrow funds, they must borrow in increments of $1,000. Any cash available in excess of the minimum cash balance will be used to pay down long-term debt. The company will either borrow funds or repay funds in a given month, but never both.