View the balance sheet.

Other budget data for Tinted Toy Company:

View the other budget data.

Read the requirements. schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. $($Round all calculations to the nearest dollar.$)$

Begin by preparing the sales budget.

Balance Sheet

$\backslash$table$[[\backslash$table$[[$Tinted Toy Company$],[$Balance Sheet$],[$December $31,2025]]],[$Assets$],[$Current Assets:$],[$Cash$,$$$,50,000,,],[$Accounts Receivable,,$55,000,,],[$Raw Materials Inventory,,$1,000,,],[$Finished Goods Inventory,,$4,800,,],[$Total Current Assets,,,$$,110,800],[$Property$,$ Plant, and Equipment:$],[$Equipment$,,150,000,,],[$Less: Accumulated Depreciation,,$(39,000),,111,000],[$Total Assets,,,$$,221,800],[$Liabilities$],[$Current Liabilities:$],[$Accounts Payable,,,$$,14,000],[$Stockholders$\text{'}$ Equity$],[$Common Stock, no par,$$,140,000,,],[$Retained Earnings,,$67,800,,],[$Total Stockholders' Equity,,,,$207,800],[$Total Liabilities and Stockholders' Equity,,,$$,221,800]]$

Budget Data

$($Unless otherwise noted, assume all of the following events occurred during $2025$ and that any balances given are stated as of December $31,2025.)$

a$.$ Budgeted sales are $1,100$ sets for the first quarter and expected to increase by $200$ sets per quarter. Cash sales are expected to be $10\%$ of total sales, with the remaining $90\%$ of sales on account. Sets are budgeted to sell for $$90$ per set.

b$.$ Finished Goods Inventory on December $31,2025,$ consists of $200$ sets at $$24$ each.

c$.$ Desired ending Finished Goods Inventory is $30\%$ of the next quarter's sales; first quarter sales for $2027$ are expected to be $1,900$ sets. FIFO inventory costing method is used.

d$.$ Raw Materials Inventory on December $31,2025,$ consists of $1,000$ pounds. Direct materials requirement is five pounds per set. The cost is $$1$ per pound.

e$.$ Desired ending Raw Materials Inventory is $10\%$ of the next quarter's direct materials needed for production; desired ending inventory for December $31,2026,$ is $1,000$ pounds; indirect materials are insignificant and not considered for budgeting purposes.

f$.$ Each set requires $0\mathrm{.}40$ hours of direct labor, direct labor costs average $$10$ per hour.

g$.$ Variable manufacturing overhead is $$4\mathrm{.}00$ per set.

h$.$ Fixed manufacturing overhead includes $$4,000$ per quarter in depreciation and $$16,895$ per quarter for other costs, such as utilities, insurance, and property taxes.

i$.$ Fixed selling and administrative expenses include $$8,500$ per quarter for salaries; $$5,100$ per quarter for rent; $$1,050$ per quarter for insurance; and $$1,000$ per quarter for depreciation.

j$.$ Variable selling and administrative expenses include supplies at $2\%$ of sales.

k$.$ Capital expenditures include $$55,000$ for new manufacturing equipment, to be purchased and paid for in the first quarter.

I. Cash receipts for sales on account are $50\%$ in the quarter of the sale and $50\%$ in the quarter following the sale; Accounts Receivable balance on December $31,2025,$ is expected to be received in the first quarter of $2026$; uncollectible accounts are considered insignificant and not considered for budgeting purposes.

m$.$ Direct materials purchases are paid $80\%$ in the quarter purchased and $20\%$ in the following quarter; Accounts Payable balance on December $31,2025,$ is expected to be paid in the first quarter of $2026.$

n$.$ Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred.

$-.$ Income tax expense is projected at $$3,500$ per quarter and is paid in the quarter incurred.

p$.$ Tinted Toy Company desires to maintain a minimum cash balance of $$40,000$ and borrows from the local bank as needed in increments of $$1,000$ at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $$1,000$; interest is $5\%$ per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter.