Answer Happy

R A Chad Associates, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in the preparation of the master budget for the final quarter. (a) As of September 30, 2005, the company's balance sheet showed the following account balances: Cash Accounts receivables Inventory Building & equipment (net) Accounts payable Capital Retained earnings $18 000 96 000 25 200 428 200 November December January $36 600 380 000 150 800 $567 400 $567 400 (b) Actual sales for September and budgeted sales for the final quarter are as follows: September (actual) $120 000 140 000 October 170 000 180 000 100 000 (c) Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following the sale. The accounts receivable at September 30 are as a result of September credit sales. (a) The company's gross profit rate is 40% of sales. The cost of goods sold is 60% of sales. (b) Monthly expenses are budgeted as follows: salaries and wages, $15 000 per month, shipping 6% of sales, advertising $12 000 per month, other expenses 4% of sales, depreciation of equipment will be $12 000 for the quarter. (c) At the end of each month, inventory is to be on hand equal 30% of the following month's cost of goods sold.
(d) Half of the month's inventory purchases are paid for in the month of purchase an the following month. (e) Equipment purchases during the quarter will be as follows: October $23 000 and November $6 000. Dividends totalling $6 000 will be paid in December. Required: Prepare the Cash budget along with the supporting schedules necessary for the quarter er December 31, 2005