Bravo Company is a bookstore that prepares its master budget on a quarterly basis. The following data has been assembled to assist in preparation of the master budget for the first quarter:

1. As of December 31, 2023 (the end of the prior quarter), the company's general ledger showed the following account balances:

Debit Credit

Cash 44,000

Accounts Receivable 184,000

Inventory 60,000

Building & Equipment 404,000

Accumulated Depreciation 144,000

Accounts Payable 93,000

Capital shares 200,000

Retained Earnings 255,000

Totals $ 692,000 $ 692,000

1. Actual sales for December and budgeted sales for the next four months are as follows;

December (actual) $ 280,000

January 380,000

February 580,000

March 275,000

April 220,000

1. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected 50% in the month of sale and 50% in the month following the sale. The accounts receivable at December 31^st are a result of December credit sales.
2. The company's gross margin is 30% of sales.
3. Monthly expenses are budgeted as follows:

- salaries and wages $ 25,000 per month

- advertising $ 75,000 per month

- shipping costs are 6% of sales

- depreciation is $ 12,000 per month

- other expenses are 4% of sales

f. At the end of each month, inventory is to be on hand equal to 30% of the following month's sales needs, stated at cost.

g. 25% of a month's inventory purchases is paid for in the month of purchase; the remaining 75% is paid for in the following month.

h. During February, the company will purchase a new copy machine for $ 1,500 cash. During March, other equipment will be purchased for cash at a cost of $ 90,000.

i. During January, the company will declare and pay $ 120,000 in cash dividends.

j. The company must maintain a minimum cash balance of $ 30,000. An open line of credit is available at a local bank for any borrowing that may be needed during the quarter. All borrowing is done at the beginning of a month and all repayments are made at the end of a month. Borrowing and repayments of principal must be in multiples of $ 1,000. Interest is paid only at the time of repayment of principal. The annual interest rate is 12%. (Figure out interest on whole months, example, 1/12, 2/12, etc.)

Required:

In Excel, use the data provided in this question to complete the following statements and schedules for the first quarter. Make sure you have 4 columns of numbers - January, February, March and then a total for the Quarter. Also ensure you have the proper title with the appropriate 3 lines at the top of the following;

1. Sales budget
2. Schedule of expected cash collections.
3. Inventory purchases budget
4. Schedule of cash disbursements for purchases
5. Schedule of cash disbursements for operating expenses
6. Cash budget
7. Income Statement (this can be in total and individual month information is not required).
8. Balance Sheet (this will be the March 31^st balance so only one column of numbers required.