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Create master budget, projected financial statements

PROJECT ONE HARRISON COMPANY BUDGET INSTRUCTIONS

Below you will find the data for Project One. You will be completing budgets and schedules for the firm's first quarter of operations in the year 20XY. Do all schedules and budgets showing the three months of January-March and a Total column, except for the balance sheet. Your budgets and schedules should include the following:

1. Sales budget and Schedule of Sales Cash Collections (Note - for Sales, Production and Direct Materials budgets you may need projections for April and May.)
2. Production budget
3. Direct Materials budget and Schedule of Cash Disbursements for Materials
4. Ending Raw Materials Inventory budget
5. Direct Labor budget and Schedule of Cash Disbursements for Direct Labor
6. Total Fixed and Variable Manufacturing Overhead budget and Schedule of Cash Disbursements for Overhead, and Unit Costs for Overhead
7. Ending Finished Goods Inventory budget
8. Cost Goods Manufactured and Cost of Goods Sold budgets
9. Fixed and Variable Selling and Administrative Expense budget and Schedule of Cash Disbursements for S & A Expenses
10. Schedule of Other Collections and Disbursements not included in budgets or schedules above, or other data in additional data (see below)
11. Cash budget
I suggest you do one month at a time to figure financing needs, repayments of principal, interest and ending cash balance; if financing is needed see additional data on financing.
12. Budgeted Income Statement
You will need to go back and forth between the cash budget and income statement to figure interest expense.
13. Budgeted Balance Sheet for March 31, 20XY
Just show the balance sheet for the end of the quarter not for each month.

Additional Data:
PROJECT ONE HARRISON COMPANY BUDGET INSTRUCTIONS

Below you will find the data for Project One. You will be completing budgets and schedules for the firm's first quarter of operations in the year 20XY. Do all schedules and budgets showing the three months of January-March and a Total column, except for the balance sheet. Your budgets and schedules should include the following:

1. Sales budget and Schedule of Sales Cash Collections (Note - for Sales, Production and Direct Materials budgets you may need projections for April and May.)
2. Production budget
3. Direct Materials budget and Schedule of Cash Disbursements for Materials
4. Ending Raw Materials Inventory budget
5. Direct Labor budget and Schedule of Cash Disbursements for Direct Labor
6. Total Fixed and Variable Manufacturing Overhead budget and Schedule of Cash Disbursements for Overhead, and Unit Costs for Overhead
7. Ending Finished Goods Inventory budget
8. Cost Goods Manufactured and Cost of Goods Sold budgets
9. Fixed and Variable Selling and Administrative Expense budget and Schedule of Cash Disbursements for S & A Expenses
10. Schedule of Other Collections and Disbursements not included in budgets or schedules above, or other data in additional data (see below)
11. Cash budget
I suggest you do one month at a time to figure financing needs, repayments of principal, interest and ending cash balance; if financing is needed see additional data on financing.
12. Budgeted Income Statement
You will need to go back and forth between the cash budget and income statement to figure interest expense.
13. Budgeted Balance Sheet for March 31, 20XY
Just show the balance sheet for the end of the quarter not for each month.

Additional Data:

? The firm will sell fully depreciated equipment for a $5,000 (thus a gain of $5,000 as well as a cash flow); the equipment originally cost $50,000.
? The firm will acquire new equipment at the end of March for $100,000.00.
? The firm has a line of credit with the bank to finance deficits in cash flow. It can borrow in increments of $10,000. Borrowing is always made at the end of the month in which money is needed. It must pay any interest due at the end of each month. The bank accrues 12% annual interest (1% interest per month). Repayments of any loans are made at the end of the month and can be any amount for which the firm has excess cash; but the firm must maintain a minimum cash balance of $50,000.00.
? Note - interest and income tax expense will have to be computed each month, before moving to the next month. Interest will have to be computed in doing the cash budget, and taxes when doing the income statement.

? The firm will sell fully depreciated equipment for a $5,000 (thus a gain of $5,000 as well as a cash flow); the equipment originally cost $50,000.
? The firm will acquire new equipment at the end of March for $100,000.00.
? The firm has a line of credit with the bank to finance deficits in cash flow. It can borrow in increments of $10,000. Borrowing is always made at the end of the month in which money is needed. It must pay any interest due at the end of each month. The bank accrues 12% annual interest (1% interest per month). Repayments of any loans are made at the end of the month and can be any amount for which the firm has excess cash; but the firm must maintain a minimum cash balance of $50,000.00.
? Note - interest and income tax expense will have to be computed each month, before moving to the next month. Interest will have to be computed in doing the cash budget, and taxes when doing the income statement.

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Solution Summary

This solution has a tab in excel for each of the part of a master budget (sales, production, labor, overhead, SG&A) and then creates expected financial statements. The activity is also posted to the trial balance to show where the financial statement amounts came from.

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