Problems 1.) 1. Jimi, Inc., is preparing its master budget for the quarter ended December 31. It sells a single product for $55 each. Seventy percent of all sales are on credit. Cash is paid for the remaining sales. All credit sales are collected in the month following the sale. The balance in accounts receivable is $12,000 on September 30, which represents the uncollected balance on September's sales. Budgeted sales for the next four months follow: Oct. Nov Dec Jan Sales Units 980 1200 850 1190 The unit cost is $30. The company prefers an ending inventory is 55% of the following month's sales. September's inventory is 480 units. Jimi, Inc. pay for 60% of the current month's purchases and 40% in the following month. The A/P balance on September 30 is $9.800, which represents unpaid purchases. Monthly operating expenses: Commissions (10% of sales) Shipping (4.2% of sales) Office salaries (5750 per week - assume each month has 4 weeks) Rent ($5,000 per month) Depreciation is $3,300 per month. Income taxes are 40% and will be paid on January 31. There are $2500 in taxes payable on December 31. The company requires $10,000 minimum monthly cash balance. The cash balance as of September 30 is $10,000. Loans are obtained at the end of any month when the minimum cash balance is not met. Interest is 3% per month based on the beginning of the month loan balance and is paid at the end of each month. If the monthly ending cash balance is over $10,000, loans are repaid at the end of the month. As of September 30, the loan balance is $900. Prepare a master budget (round all dollar amounts to the nearest whole dollar) for each of the months of October, November, and December include the e Miscellaneous expense budget Cash budget, including information on the loan balance Budgeted income statement Requirement (A) | Sales Budget Particulars Units Sale price per Unit Total Sales Quarter 3,030 October 980 55 53,900 November 1,200 $ 55 $ 66,000 December 850 $ 55 $ 46,750 $ $ 166,650 Requirement (B) Cash Receipts Budget Particulars Cash Sales (30% of current Month's Sales) October 16,170 November $ 19,800 December $ 14,025 $ Quarter 49,995 12,000 $ $ - 37,730 $ $ Accounts Receivables October Sales (70% of Sales received in next month) November Sales (70% of Sales received in next month) Total Cash Collections $ $ $ - 46,200 60,225 $ $ $ 37,730 46,200 133,925 28,170 $ 57,530 $ Explanation : 70% of the sales are collected in next month. So, 70% of October Sales are received in November. Likewise 70% of December Sales are received in January. Requirement (C) | Inventory Purchases Budget Particulars Budgeted Sales Add : Desired Ending Inventory Total Needs Less : Beginning Inventory Purchases Cost per Unit Total Purchases Cost October 980 660 1,640 480 1,160 30 34,800 November 1,200 468 1,668 660 1,008 $ 30 $ 30,225 December 850 655 1,505 468 1,037 $ 30 $ 31,110 Quarter 3,030 655 3,685 480 3,205 30 $ $ 96,135 November December Requirement (D) | Cash Payments for Purchase of Merchandise Particulars October Accounts Payable 9,800 October Purchases 20,880 November Purchases December Purchases Total 30,680 13,920 18,135 Quarter 9,800 34,800 30,225 18,666 93,491 12,090 18,666 30,756 32,055