Hi there,
So here’s my problem, please help me asap if you can I would very much appreciate it. I am required to prepare a budgeted income statement and balance sheet for the quarter ending 30 September 2014, but the only information I have are budgeted sales for April, May, June and a balance sheet for July 14. Don’t I need budgeted sales figures for July August and September before I can do this? Please help, if I am not making myself clear, the problem is below:
Prepare a quarterly budget covering the 3 months ending 30th September 2014. The information available for the budget is:
1. Cash sales represent 60% of all monthly sales, 50% of all credit sales are collected in the month after sale and the remainder are collected in the second month following the sale.
2. Inventory purchases that are made on account equal 60% of the sales forecast for that month, 30% of the purchases are paid for in the month of purchase, and 70% are paid for in the following month.
3. Ending inventory on 30 September 2014 is projected to be 57 800
4. Equipment purchases at the end of September are budgeted at 95 000
5. Other quarterly expenses are budgeted as follows: electricity 14 700, rent 55 000, salaries 154 000. These expenses are paid when incurred.
6. Depreciation for the quarter is 14 000
7. The balance sheet as a 1 July 2014 will have the following account balance:
Cash at bank 29 760
Acc. Rec. 98 460
Inventory 60 400
Equipment 290 000
Acc Dep. 94 000
Accounts payable 85 370
Share capital 100 000
Retained earnings 199 250

8. Budgeted sales are: April 240 000, May 227 000, June 220 000
Required
Prepare a budgeted income statement and balance sheet for the quarter ending 30 September 2014. Ignore income tax.