You are the managerial accountant at Reliable Company. You have been assigned to support the marketing department and manage its master budget. The marketing department is responsible for the following:

• Managing the firm's marketing
• Hiring subcontractors
• Selling the consulting expertise to smaller outside firms

The department's expenses are as follows:

• Salaries and benefits of $48,000/month
• Web site operations of $21,000/ month
• Online advertising expenses of $15,000/month
• Miscellaneous expenses of $3,500/month

The sales forecast for its consulting services are as follows:

• April:$190,000
• May:$200,000
• June:$205,000

The department pays a sales commission of 5%, and this is paid in the following month. Subcontractor expenses are estimated at 45% of sales and are paid the month after they are billed. Consulting fees are collected 20% in the month of sale, 70% in the following month, and 10% in the second month following sale.

Refer to the attached schedules below

Develop a master budget for the marketing department.

This task includes the following:

• Completing the attached schedules for a master budget for the marketing department
• Supporting schedules for cash disbursements and collections

Analyze additional needs and resources based on those budgets. Make recommendations based on those budgets.

Respond to the following for this assignment:

• Develop the marketing department's master budget.
• Prepare a schedule of expected cash collections.
• Make recommendations based on those budgets.

Using the schedule template provided, complete the marketing department's master budget and schedule of expected cash collections.

Budget Data:

Reliable Company Marketing Department Master Budget

Data April May June

Budgeted consulting revenues $190,000 $200,000 $205,000

Less: Sales commissions (5% of sales) $9,500 $10,000 $10,250

Less: Cost of sales (45% of sales) $85,500 $90,000 $92,250

Net consulting revenues $95,000 $100,000 $102,500

Accounts Receivable Collections

Month of sale 20%

Month following sale 70%

Second month following sale 10%

Monthly Budgeted Expenses

Salaries and benefits $48,000

Web site operations $21,000

Online advertising expenses $15,000

Other misc. expenses $3,500

Accounts Payable Payments

Month of sale 40%

Month following sale 60%

Accounts Payable

Online advertising expenses $15,000