Earrings Unlimited Master Budget

PROJECT A - Case 9-30
Student Name:		Lucille A. McElroy
SALES BUDGET:
			April	May	June	Quarter
Budgeted unit sales			65,000	100,000	50,000	215,000
Selling price per unit			10	10	10	10
Total Sales			650,000	1,000,000	500,000	2,150,000
SCHEDULE OF EXPECTED CASH COLLECTIONS:
			April	May	June	Quarter
February sales		10%	26,000			26,000
March sales	70%	10%	280,000	40,000		320,000
April sales (20%)	70%	10%	130,000	455,000	65,000	650,000
May sales	20%	70%		200,000	700,000	900,000
June sales		20%			100,000	100,000
Total Cash Collections			436,000	695,000	865,000	1,996,000
MERCHANDISE PURCHASES BUDGET:
			April	May	June	Quarter
Budgeted unit sales			65,000	100,000	50,000	215,000
Add desired ending inventory		40%	40,000	20,000	12,000	12,000
Total needs			105,000	120,000	62,000	227,000
Less beginning inventory			26,000	40,000	20,000	26,000
Required purchases			79,000	80,000	42,000	201,000
Cost of purchases @ $4 per unit			$316,000	$320,000	$168,000	$804,000
Desired Ending Inventory: 40% of the next month's unit sale
BUDGETED CASH DISBURSEMENTS FOR MERCHANDISE PURCHASES:
			April	May	June	Quarter
Accounts payable		given	$100,000			100,000
April purchases		50%	158,000	$158,000		316,000
May purchases		50%		160,000	$160,000	320,000
June purchases		50%			84,000	84,000
Total cash payments			258,000	318,000	244,000	820,000
EARRINGS UNLIMITED
CASH BUDGET
FOR THE THREE MONTHS ENDING JUNE 30
			April	May	June	Quarter
Cash balance			74,000	50,000	50,000	74,000
Add collections from customers			436,000	695,000	865,000	1,996,000
Total cash available			510,000	745,000	915,000	2,070,000
Less Disbursements
Merchandise purchases			258,000	318,000	244,000	820,000
Advertising			200,000	200,000	200,000	600,000
Rent			18,000	18,000	18,000	54,000
Salaries			106,000	106,000	106,000	318,000
Commissions			26,000	40,000	20,000	86,000
Utilities			7,000	7,000	7,000	21,000
Equipment purchases		given	-	16,000	40,000	56,000
Dividends paid			15,000			15,000
Total Disbursements			630,000	705,000	635,000	1,970,000
Excess (deficiency) of receipts			(120,000)	40,000	280,000	100,000
over disbursements
Financing:
Borrowings			170,000	10,000		180,000
Repayments					(180,000)	(180,000)
Interest		*			(5,300)	(5,300)
Total financing			170,000	10,000	(185,300)	(5,300)
Cash balance, ending			50,000	50,000	94,700	94,700
	Principal		Interest Rate		Months
*	170,000	x	1%	x	3	5,100
	10,000	x	1%	x	2	200
Total interest						5,300
EARRINGS UNLIMITED
BUDGETED INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30
Sales					$2,150,000
Variable expenses:
Cost of goods sold @		$4	per unit	860,000
Commissions		4%		86,000	946,000
Contribution Margin					1,204,000
Fixed expenses:
Advertising				600,000
Rent				54,000
Salaries				318,000
Utilities				21,000
Insurance				9,000
Depreciation	$14,000.00	x	3	42,000	1,044,000
Net operating income					160,000
Interest expense					(5,300)
Net income					$154,700
EARRINGS UNLIMITED
BUDGETED BALANCE SHEET
JUNE 30
Assets:
Cash					$94,700
Accounts receivable (see below)					500,000
Inventory	12000	units @	$4		48,000
Prepaid insurance		21000	-	9,000	12,000
Property and equipment, net		950000	56,000	(42,000)	964,000
Total assets					1,618,700
Liabilities and Stockholders' Equity
Accounts payable, purchases		50%	$168,000		84,000
Dividends payable					15,000
Capital stock					800,000
Retained earnings (see below)					719,700
Total liabilities and stockholders' equity					$1,618,700
Accounts receivable at June 30:
	unit sales	sales price
May sales	100000	$10	10%		100,000
June sales	50000	10	80%		400,000
Total					500,000
Retained earnings at June 30:
Balance, March 31					580,000
Add net income					154,700
Total					734,700
Less dividends declared					15,000
Balance, June 30					719,700

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