Wallaby Kite Company, a small Melbourne firm that sells kites on the Web, wants a master budget for the 3months beginning January 1, 20X2. It desires an ending minimum cash balance of $ 20,000 each month. Sales are forecasted at an average wholesale selling price of $ 8 per kite. Merchandise costs average$ 4 per kite. All sales are on credit, payable within 30 days, but experience has shown that 60% of current sales are collected in the current month, 30% in the next month, and 10% in the month thereafter. Bad debts are negligible.

In January, Wallaby Kite is beginning just- in- time (JIT) deliveries from suppliers, which means that purchases will equal expected sales. On January 1, purchases will cease until inventory decreases to $ 24,000, after which time purchases will equal sales. Purchases during any given month are paid in full during the following month.

Monthly operating expenses are as follows:

Wages and salaries $60,000

Insurance expired $500

Depreciation $1,000

Miscellaneous $10,000

Rent $1000/month + 10% of quarterly sales over $40,000

Cash dividends of $ 6,000 are to be paid quarterly, beginning January 15, and are declared on the fifteenth of the previous month. All operating expenses are paid as incurred, except insurance, depreciation, and rent. Rent of $ 1,000 is paid at the beginning of each month, and the additional 10% of sales is settled quarterly on the tenth of the month following the need of the quarter. The next rent settlement date is January 10.

The company plans to buy some new fixtures for $ 12,000 cash in March. Money can be borrowed and repaid in multiples of $ 2,000. Management wants to minimize borrowing and repay rapidly. Simple interest of 10% per annum is computed monthly but paid when the principal is repaid. Assume that borrowing occurs at the beginning, and repayments at the end, of the months in question. Compute interest to the nearest dollar.

October $152,000

November $100,000

December $100,000

January $248,000

February $280,000

March $152,000

April $180,000

Liabilities as of December 31, 2007

Accounts payable $142,200

Dividends payable $6,000

Rent payable $31,200

Owners' Equity $102,800

$282,200

Assets as of December 31, 2007

Cash $20,000

Accounts receivable $50,000

Inventory $156,200

Unexpired insurance $6,000

Fixed assets, net $50,000

$282,200

Required: A master budget using EXCEL including a budgeted income statement, balance sheet, cash budget, and supporting schedules for the months January 2008 - March 2008.