Thumbtacks March 31, 2014, balance sheet follows: The budget committee of Thumbtack Office Supply has assembled the following data. a. Sales in April are expected

Thumbtack’s March 31, 2014, balance sheet follows:

The budget committee of Thumbtack Office Supply has assembled the following data.
a. Sales in April are expected to be $ 40,000. Thumbtack forecasts that monthly sales will increase 2% over April sales in May. June’s sales will increase by 4% over April sales. July sales will increase 20% over April sales. Cash receipts are 80% in the month of the sale and 20% in the month following the sale.
b. Thumbtack maintains inventory of $ 11,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. Purchases are paid 30% in the month of the purchase and 70% in the month following the purchase.
c. Monthly salaries amount to $ 7,000. Sales commissions equal 5% of sales for that month. Salaries and commissions are paid 30% in the month incurred and 70% in the following month. d. Other monthly expenses are as follows:
Rent: $ 2,400, paid as incurred
Depreciation: $ 200
Insurance: $ 100, expiration of prepaid amount
Income tax: $ 1,700, paid as incurred

Requirements
1. Prepare Thumbtack’s sales budget for April and May 2014. Round all amounts to the nearest $ 1.
2. Prepare Thumbtack’s inventory, purchases, and cost of goods sold budget for April and May.
3. Prepare Thumbtack’s selling and administrative expense budget for April andMay.

THUMBTACK OFFICE SUPPLY Balance Sheet March 31, 2014 Assets urent Assets Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets $ 18,000 12,000 16,000 2,200 5 48,200 Property, Plant and Equipment: Equipment and Fixtures Less: Accumulated Depreciation otal Assets 45,000 30,000) 15,000 S 63,200 Liabilities urrent iabilities Accounts Payable Salaries and Commissions Payable otal abilities 12,500 1,400 5 13,900 Stockholders' Equity 16,000 33,300 ommon Stock Retained Earnings 49,300 S 63,200 Total StockholdersEquity otal iabilities and Stockholdrs Equity