Master Budget Saskatoon Kite Company

Saskatoon Kite Company, a small merchandising firm that sells kites wants a master budget for the next three months, beginning January 1, 20XX. It desires an ending minimum cash balance of $5,000 each month. Sales are forecasted to be 7,750 units in January, 9,375 units in February, and 4,750 units in March at an average wholesale selling price of $8 per kite Ending inventory is 12% of the following months expected sales. Merchandise costs an average of $4 per kite. Purchases during any given month are paid in full during the following month. All sales are on credit, payable within 30 days, but experience has shown that 60% of current sales are collected in the current month, 30% in the next month, and 10% in the month thereafter. Bad debts are negligible. Monthly operating expenses are as follows: Wages and salaries $12,000 Depreciation $250 Miscellaneous $2,500 Rent $2,000 Cash dividends of $1,500 are to be paid in January. The company plans to buy some new fixtures for $3,000 cash in March Cash Balance as of December 31, 20X5 is $5,000 From the beginning Balance Sheet: Retained Earnings $61,215 Capital Stock $9,000 Prepare a master budget including a Sales Budget, Purchases Budget, Expense Budget , Budgeted Income Statement, Cash Receipts and Payments Budgets, Cash Budget and Budgeted Balance Sheet for the months January through March 20XX.