1.

Sales Budget:
20x0

20x1

December
Total sales
Cash sales*

400,000
$

Sales on account

January
440,000

100,000 $

110,000

300,000

330,000

2. Cash receipts budget:

20x1
January
Cash sales

110,000 $

February
121,000

Cash collections from credit sales

made during current quarter*

33,000

36,300

270,000

297,000

413,000 $

454,300

Cash collections from credit sales

made during previous quarter
Total cash receipts

3. Purchases budget:
20x0
December

Budgeted CGS

20x1
January

280,000

308,000

154,000

169,400

Total goods needed

434,000

477,400

Less: Expected beginning inventory

140,000

154,000

Purchases

294,000

323,400

Add: Desired ending inventory

4. Cash disbursements budget:

20x1
January

February

Inventory purchases:
Cash payments for purchases during
the current month

129,360 $

142,296

176,400

194,040

Cash payments for purchases during

the preceding month

Total cash payments for inventory

305,760 $

336,336

Other expenses
Sales salaries
Advertising and promotion

21,000.0

###

16,000

###
###

Administrative salaries

21,000

Interest on bonds

15,000

Property taxes

Sales commission

$
$

4,400

5,400
4,840

Total cash payments for other expenses

77,400 $

68,240

Total cash disbursements

383,160 $

404,576

5. Summary cash budget:

20x1
January
Cash receipts
Less: Cash disbursements
Change in cash balance due to operations
Sale of marketable securities

February

413,000 $

454,300

383,160

404,576

29,840

49,724

15,000

Proceeds from bank loan (1/2/x5)

100,000

Purchase of equipment

125,000

Repaymeent of bank loan

interest payment*
Payment of dividends
Change in cash balance during the quarter
Cash balance, beginning of period
Cash balance, end of period

6. Analysis of Short-Term Financing Need

Projected cash balance as of December 31, 20x0

Less: Minimum cash balance

Cash available for equipment purchases

Projected proceeds from sale of marketable securities

25,000
10,000

Cash available
Less: Cost of investment in equipment

35,000

15,000
25,000

Required short-term borrowing

125,000
100,000

7. Income Statement
Revenue

1,456,400

COGS

1,019,480

Gross Margin

436,920

Expenses:

Sales salaries

63,000

Advertising and promotion

48,000

Administrative salaries

63,000

Interest on bonds

7,500

Property taxes

2,700

Sales commissions

14,564

Interest on bank loan

2,500

Depreciation

75,000

Total expenses:

276,264

Net Income:

160,656

Retained Earnings as of December

107,500

Net Income

160,656

Dividends

50,000

Retained Earnings as of March

218,156

8. Retained Earnings

9. Balance Sheet
Cash

25,954

Accounts receivable

359,370

Marketable Securities

Inventory

Buildings and Equipment

676,000

Total Assets

1,247,664

Accounts payable

223,608

Bond interest payable

5,000

property taxes payable

900

Bonds payable (10% Due in 20x6)

300,000

Common Stock

500,000

Retained Earnings

218,156

Total Liabilities and Stockholder's Equity

1,247,664

186,340

20x1
February

March

1st
Quarter

484,000
$

532,400

121,000 $

133,100 $

363,000

399,300

1,456,400
364,100
1,092,300

20x1
March

1st
Quarter

133,100 $

364,100

39,930

109,230

326,700

893,700

499,730 $

1,367,030

20x1
February

March

1st
Quarter

338,800

372,680

1,019,480

186,340

186,340

186,340

525,140

559,020

1,205,820

169,400

186,340

154,000

355,740

372,680

1,051,820

20x1
March

1st
Quarter

149,072 $

420,728

213,444

583,884

362,516 $

1,004,612

21,000.0

63,000.0

16,000

48,000.0

21,000

63,000.0

$
$

15,000.0

5,400.0

5,324

14,564.0

63,324

208,964.0

425,840

1,213,576.0

20x1
March

Entire
Quarter

499,730 $

1,367,030

425,840 $

1,213,576

73,890 $

153,454

15,000

100,000

125,000

100,000 $

100,000

2,500 $

2,500

50,000 $

50,000

(9,046)

35,000

25,954