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Planning And Budgeting

Master Budget – Victoria Kite Company

Schedule a: Sales budget

October $38,000 December $25,000 February $75,000 April $45,000
November 25,000 January 62,000 March 38,000

Schedule b: Cash Collections Budget

January February March Total
Cash sales $6,200 $22,500 $22,800 $51,500
Collections from prior month 25,000 62,000 75,000 139,500
Total collections $31,200 $84,500 $97,800 $213,500

Schedule c: Purchases Budget

January February March Total
Desired ending inventory $8,050 $6,000 $6,000 $20,050
Plus cost of goods sold 31,000 37,500 19,000 87,500
Total need $39050 $43,500 $25,000 $107,550
Less beginning inventory 39,050 8,050 6,000 53,100
Total purchases $0 $12,300 $19,000 $54,450

Schedule d: Disbursements for purchases

January February March Total
For December $35,000 $35,000
For January − − $0
For February 35,450 $35,450 68,900
For March 19,000 19,000
Total disbursements $35,000 $34,450 $54,450 $122,900

Schedule e and f: Statement of Cash Receipts

January February March Total
Cash Expenses
Salaries and Wages 15,000 15,000 15,000 45,000
Units 7,750 9,375 4,750 21,875
Rent 5,750 5,750 5,750 17,250
Fixtures $3,000
Other 2,500 2,500 2,500 7,500
Total disbursements for expenses $31,000 $32,625 $31,000 $94,625
Noncash expenses:
Depreciation 250 250 250 750
Net Operating Income $30,750 $32,375 $30,750 $93,875

Budgeted Income Statement:

January February March January – March Total
Sales $62,000 $75,000 $38,000 $175,000
Cost if goods sold 31,000 37,500 19,000 87,500
Gross Margin 31,000 37,500 19,000 87,500
Operating Expenses
Salaries and Wages 15,000 15,000 15,000 45,000
Units 7,750 9,375 4,750 21,875
Rent 5,750 5,750 5,750 17,250
Insurance 125 125 125 375
Other 2,500 2,500 2,500 7,500
Interest 129 129 − 258
Depreciation 250 250 250 750
Total Operating Expense $54,754 $61,254 $42,625 $158,633
Net Operating...