Prepare a quarterly sales budget, a cash receipts budget, a production budget (in units), a direct materials purchases budget, cash disbursements for purchases budget, a direct labor budget, an overhead budget, and a cash budget. In addition, prepare an ending finished goods inventory budget, and an income statement for the year. Please label each schedule.

Cash $ 25,000

Accounts Receivable 9,000

Inventory Raw Materials 360

FG Inventory 3,549

Land 8,000

Buildings and Equip 70,000

Accum Depr ( 29,200)

Total Assets $ 83,709

Accounts Payable $ 2,580

Capital Stock 17,500

RE 63,629

Total Liab and Stockholders $ 83,709

You have gathered the following information about expected activity:

1. The marketing department projects the following sales levels:

Quarter 1, 2022 1,975 statues

Quarter 2, 2022 2,800 statues

Quarter 3, 2022 2,000 statues

Quarter 4, 2022 2,025 statues

Quarter 1, 2023 2,100 statues

Quarter 2, 2023 2,400 statues

The statues are expected to sell for $30.1 each.

ABC sells all merchandise on credit. Historically, ABC receives 40% of each quarter's sales during the quarter and 60% in the next quarter.

2. ABC plans to stock ending inventory of finished goods to equal 30% of the next quarter's sales.

Finished Goods inventory at 1/1/2022 is 210 statues at a cost of $16.9 per unit.

ABC uses FIFO to account for finished goods inventory.

3. The statues are made with both cement and plaster. The statues each require 4 pounds of cement at a cost of $0.9 per pound. In addition, the statues require 4 pounds of plaster at $0.38 per pound. At 12/31/2021, ABC had 400 pounds of cement on hand and no plaster on hand. ABC plans to keep 25% of the cement and plaster required for next quarter's production in inventory at the end of each quarter. ABC pays for all purchases 55% in the quarter of purchase and 45% in the quarter following purchase.

4. Each statue requires 0.75 hours of direct labor at $11.5 per hour. Employees are paid on the last day of each month for that month's work. Other costs are paid in the quarter unless otherwise noted.

5. Variable overhead is estimated at $2 per direct labor hour. Fixed overhead costs are $29000 per year. Fixed overhead includes depreciation of $8000 per year.

6. Variable selling and administrative costs are $1.85 per unit. Fixed selling and admin costs are $37000 per year. (This includes $3600 of depreciation per year.)

7. ABC makes quarterly income tax payments of $500 each. The corporate income tax rate is 21% of net income before taxes (consider any overpayments on your balance sheet).

8. ABC pays quarterly dividends of $1400.

9. ABC will purchase additional equipment on the following schedule (depreciation is already included above):

Quarter 1 $ 3,800

Quarter 2 $ 2,900

Quarter 3 $ -

Quarter 4 $ -

10. ABC has to maintain a minimum cash balance of $4,000. Any projected borrowings are assumed to be borrowed at the beginning of the quarter. Payments are made at the end of the following quarters to the extent cash is available. All borrowings and repayments are made in $1,000 increments. Interest is paid at the time of repayment. Interest is calculated at 10% per year (no compounding).

Answer rating: 100% (QA)

Quarterly Sales Budget The Quarterly Sales Budget is a forecast of sales that are expected to be made by a company over a period of three months This budget helps a company plan and track its sales go... View the full answer