Prepare a 12-month Master Budget for a company of your choosing. It can be a company that you are closely connect too or one randomly selected. COMPLETED IN EXCEL.

As you are preparing the Master Budget, some information is NOT provided. You are required to decide or predict or forecast this information.

1. Provide an introduction for the company you have chosen. The introduction should include the following:

• Name of company
• Location of company
• Name of owner
• Nature of the business.
• Type of product
• Fiscal period

2. For the company that you have selected - Prepare a 12-month Master Budget. Your submission must show each month’s activities.
3. Here are some considerations to include in preparing the budget:

• You must forecast your sales, purchases, direct labour and manufacturing overhead for each month and any other information as required
• All sales are on accounts
• Expected collections are to be 50% in the month of the sale, 30 % in the first month following the sale, and 20% in the second month following the sale.
• Production the company will end each month with sufficient inventory to cover 20% of the following month’s sales. The newyear started with 600 units in stock and plan to finish each year with 825 units in stock.
• It pays 60% of direct materials purchase in cash in the month of purchase and the balance is due in the month following the purchase. It pays all other items above in the month incurred, except for selling and administrative expenses that include $1,000 of amortization per month.
• Cost of Goods Sold: 60% of the sale and desired ending inventory 20% of next month’s sale
• Payment Pattern: 40% of purchases paid in the month of the purchase and 60% paid in the next month.
• Cash in Bank – January 2020 is $20,000.
• The company expected to purchase equipment in March 2020 for $10,000.
• Dividend paid per quarter $2,000.
• Selling and administration expense per month $ 40,000.
• The equipment balance as at December 31, 2029, is $60,000. Accumulated depreciation – straight line; 5 years
• Common stock is $ 6,00
• The company has access to a line of credit with the bank with the following terms – the interest rate is 1% per month on the first day of the month, the interest payable is calculated at 1% of the previous month’s outstanding balance. Borrowings in a given month are taken out at the beginning of the month.
• The company wishes to maintain a minimum balance of $10,000 at all times.
• Ensure that your total boxes correctly total up the rows in your columns.

Answer rating: 100% (QA)

Name of company Sunshine Corporation Location of company New York Name of owner Joa Lara Nature of the business Manufacturing of Premium Teabags FMCG ... View the full answer