You have been asked to prepare a complete master budget for your store for June, July, and August. You are responsible for its actual full preparation. All accounting is done centrally, so you have no expert help on the premises. In addition, tomorrow the branch manager and the assistant controller will be here to examine your work; at that time, they will assist you in formulating the final budget document. You want to make a favorable impresssioon on your superiors, so you gather the following data as of May 31, 20X5:
1) Prepare a budgeted income statement for the coming quarter, a budgeted statement of monthly cash recipts and disbursements(for each of the next three months), and a budgeted balance sheet for August 31, 20X5. All operations are evaluated on a before-income tax basis, so income taxes may be ignored here.
2) Explain why there is a need for a bank loan and what operating sources supply cash for repaying the bank loan.
There is a need of Bank loan in the month of June of $296500. ...
This discusses the budgeted income statement for the coming quarter