Financial Planning & Budgeting Using Excel 2007

1st & 2nd May 2009, Karachi.

Karachi Branch Council 2009 – ICMAP

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 Budgeting:
Budgeting: The
The Basis
Basis for
for
Planning
Planning and
and Control
Control
A
A budget
budget isis aa comprehensive
comprehensive financial
financial
plan
plan for
for achieving
achieving thethe financial
financial and
and
operational
operational goals
goals of
of an
an organization.
organization.

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 Benefits
Benefits Derived
Derived from
from Budgeting
Budgeting
Enhanced managerial
responsibility

Coordination Performance
of activities Benefits evaluation

Assignment of decision
making responsibilities

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 Establishing
Establishing Budgeted
Budgeted Amounts:
Amounts:
The
The “Behavioral”
“Behavioral” Approach
Approach
Budget Problems Solution
 Perceived unfair or  Reasonable and
unrealistic goals. achievable budgets.
 Poor management-  Employee participation
employee in budgeting process.
communications.

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 Participation
Participation in
in Budget
Budget Process
Process

Top M anagem ent

M id d le M id d le
M anagem ent M anagem ent

S u p e r v is o r S u p e r v is o r S u p e r v is o r S u p e r v is o r

Flow of Budget Data

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 The
The Budget
Budget Period
Period
The annual operating budget may be
divided into quarterly or monthly budgets.

2001 2002 2003 2004

Capital Budgets

A continuous budget is usually a twelve-month budget

that adds one month as the current month is completed.

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 The
The Master
Master Budget
Budget
Production Cost of goods
Sales schedule sold and ending
inventory
forecast budgets

Budgeted
financial Capital Operating
budgets: expenditures expense
 cash
budget budgets
 income
 balance sheet

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 Preparing
Preparing the
the Master
Master Budget:
Budget:
An
An Illustration
Illustration
That’s enough talking
about budgets, now
show me an example!

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 Preparing
Preparing the
the Master
Master Budget:
Budget:
An
An Illustration
Illustration
Sales
Budget

Estimated Estimated
Unit Sales Unit Price

Analysis of economic and market conditions

+
Forecasts of customer needs from marketing personnel
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 Preparing
Preparing the
the Master
Master Budget:
Budget:
An
An Illustration
Illustration
Ellis Magnet Co. is preparing budgets for the quarter
ending June 30. The sales price is $10 per magnet.
Budgeted sales for the next four months are:
April 20,000 magnets @ $10 = $200,000
May 50,000 magnets @ $10 = $500,000
June 30,000 magnets @ $10 = $300,000
July 25,000 magnets @ $10 = $250,000
SALES BUDGET

The Sales Budget

July is needed for June ending inventory computations.
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 The
The Production
Production Budget
Budget

Sales
Sales Production
Budget
Budget Budget
d
ed
ette
pl
l e
oomm
Cc

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 The
The Production
Production Budget
Budget
Ellis wants ending inventory
to be 20 percent of the next month’s
budgeted sales in units.

4,000 units were on hand March 31.

Let’s prepare the production budget.

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 The
The Production
Production Budget
Budget
Production
Production must
must be
be adequate
adequate to
to meet
meet
budgeted
budgeted sales
sales and
and to
to provide
provide sufficient
sufficient
ending
ending inventory.
inventory.
Budgeted product sales in units
+ Desired product units in ending inventory
= Total product units needed
– Product units in beginning inventory
= Product units to produce

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 The
The Production
Production Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Desired ending inventory
Total units needed
Less beginning inventory
Units to produce

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 The
The Production
Production Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Desired ending inventory 10,000 6,000 5,000
Total units needed 30,000 56,000 35,000
Less beginning inventory
Units to produce

Ending inventory = 20% of next month's production needs.

June ending inventory = .20 × 25,000 July units = 5,000 units.

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 The
The Production
Production Budget
Budget
PRODUCTION BUDGET

April May June

Budgeted unit sales 20,000 50,000 30,000
Desired ending inventory 10,000 6,000 5,000
Total units needed 30,000 56,000 35,000
Less beginning inventory 4,000 10,000 6,000
Units to produce 26,000 46,000 29,000

Ending inventory = 20% of next month's production needs.

June ending inventory = .20 × 25,000 July units = 5,000 units.
Beginning inventory is last month's ending inventory.

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 The
The Production
Production Budget
Budget

Production Production
Budget Budget
Units Material
t ed Purchases
e
pl
om
C

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 The
The Production
Production Budget
Budget
Material
Material Purchases
Purchases
The
The material
material purchases
purchases budget
budget isis based
based on
on
production
production quantity
quantity and
and desired
desired material
material
inventory
inventory levels.
levels.
Units to produce
× Material needed per unit
= Material needed for units to produce
+ Desired units of material in ending inventory
= Total units of material needed
– Units of material in beginning inventory
= Units of material to purchase
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 The
The Production
Production Budget
Budget
Material
Material Purchases
Purchases
Five
Five pounds
pounds of
of material
material are
are needed
needed for
for each
each
unit
unit produced.
produced.
Ellis
Ellis wants
wants to to have
have materials
materials on
on hand
hand at
at the
the
end
end ofof each
each month
month equal
equal to
to 10
10 percent
percent ofof
the
the following
following month’s
month’s production
production needs.
needs.
The
The materials
materials inventory
inventory on
on March
March 31
31 isis
13,000
13,000 pounds.
pounds. JulyJuly production
production is
is
budgeted
budgeted forfor 23,000
23,000 units.
units.

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 The
The Production
Production Budget
Budget
Material
Material Purchases
Purchases
April May June
Units to produce 26,000 46,000 29,000
Pounds per unit 5 5 5
Material needs (lbs.) 130,000 230,000 145,000
Desired ending inventory
Total material needs (lbs.)
Less beginning inventory
Material purchases (lbs.)

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 The
The Production
Production Budget
Budget
Material
Material Purchases
Purchases
April May June
Units to produce 26,000 46,000 29,000
Pounds per unit 5 5 5
Material needs (lbs.) 130,000 230,000 145,000
Desired ending inventory 23,000 14,500 11,500
Total material needs (lbs.) 153,000 244,500 156,500
Less beginning inventory
Material purchases (lbs.)

Ending inventory = 10% of next month's material needs.

June ending inventory = .10 × (23,000 units × 5 lbs. per unit).
June ending inventory = 11,500 lbs.

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 The
The Production
Production Budget
Budget
Material
Material Purchases
Purchases
April May June
Units to produce 26,000 46,000 29,000
Pounds per unit 5 5 5
Material needs (lbs.) 130,000 230,000 145,000
Desired ending inventory 23,000 14,500 11,500
Total material needs (lbs.) 153,000 244,500 156,500
Less beginning inventory 13,000 23,000 14,500
Material purchases (lbs.) 140,000 221,500 142,000

Ending inventory = 10% of next month's material needs.

June ending inventory = .10 × (23,000 units × 5 lbs. per unit).
June ending inventory = 11,500 lbs.
Beginning inventory is last month's ending inventory.
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 Cash
Cash Payments
Payments for
for
Material
Material Purchases
Purchases
Materials
Materials used
used inin production
production cost cost $.40
$.40
per
per pound.
pound. One-half
One-half of of aa month’s
month’s
purchases
purchases areare paid
paid for
for in
in the
the month
month of of
purchase;
purchase; the
the other
other half
half isis paid
paid for
for in
in the
the
following
following month.
month.
No
No discount
discount terms
terms are
are available.
available.
The
The accounts
accounts payable
payable balance
balance on
on
March
March 31
31 is
is $12,000.
$12,000.
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 Cash
Cash Payments
Payments for
for
Material
Material Purchases
Purchases
April May June
Material purchases (lbs.) 140,000 221,500 142,000
Cost per pound $ 0.40 $ 0.40 $ 0.40
Total cost $ 56,000 $ 88,600 $ 56,800
Payables from March $ 12,000
April purchases
May purchases
June purchases
Total payments in month

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 Cash
Cash Payments
Payments for
for
Material
Material Purchases
Purchases
April May June
Material purchases (lbs.) 140,000 221,500 142,000
Cost per pound $ 0.40 $ 0.40 $ 0.40
Total cost $ 56,000 $ 88,600 $ 56,800
Payables from March $ 12,000
April purchases 28,000 $ 28,000
May purchases
June purchases
Total payments in month

½ × $56,000 = $28,000

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 Cash
Cash Payments
Payments for
for
Material
Material Purchases
Purchases
April May June
Material purchases (lbs.) 140,000 221,500 142,000
Cost per pound $ 0.40 $ 0.40 $ 0.40
Total cost $ 56,000 $ 88,600 $ 56,800
Payables from March $ 12,000
April purchases 28,000 $ 28,000
May purchases 44,300 $ 44,300
June purchases
Total payments in month

½ × $56,000 = $28,000
½ × $88,600 = $44,300

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 Cash
Cash Payments
Payments for
for
Material
Material Purchases
Purchases
April May June
Material purchases (lbs.) 140,000 221,500 142,000
Cost per pound $ 0.40 $ 0.40 $ 0.40
Total cost $ 56,000 $ 88,600 $ 56,800
Payables from March $ 12,000
April purchases 28,000 $ 28,000
May purchases 44,300 $ 44,300
June purchases 28,400
Total payments in month $ 40,000 $ 72,300 $ 72,700

½ × $56,000 = $28,000
½ × $88,600 = $44,300
½ × $56,800 = $28,400
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 The
The Production
Production Budget
Budget

Production Production
Budget Budget
Units Labor
Material d
e
l et
p
om
C

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 The
The Production
Production Budget
Budget
Direct
Direct Labor
Labor
Each unit produced requires 3 minutes (.05
hours) of direct labor. Ellis employs 30
persons for 40 hours each week at a rate of
$10 per hour. Any extra hours needed are
obtained by hiring temporary workers also
at $10 per hour.

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 Cash
Cash Payments
Payments for
for
Direct
Direct Labor
Labor
April May June
Units to produce 26,000 46,000 29,000
Hours per unit 0.05 0.05 0.05
Total hours required 1,300 2,300 1,450
Wage rate per hour
Direct labor cost

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 Cash
Cash Payments
Payments for
for
Direct
Direct Labor
Labor
April May June
Units to produce 26,000 46,000 29,000
Hours per unit 0.05 0.05 0.05
Total hours required 1,300 2,300 1,450
Wage rate per hour $ 10 $ 10 $ 10
Direct labor cost $ 13,000 $ 23,000 $ 14,500

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 The
The Production
Production Budget
Budget

Production Production
Budget Budget
Units Manufacturing
Material Overhead
Labor ted
e
pl
om
C

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 The
The Production
Production Budget
Budget
Manufacturing
Manufacturing Overhead
Overhead
Variable manufacturing overhead is $1 per
unit produced and fixed manufacturing
overhead is $50,000 per month.
Fixed manufacturing overhead includes
$20,000 in depreciation which does not
require a cash outflow.

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 Cash
Cash Payments
Payments for
for
Manufacturing
Manufacturing Overhead
Overhead
April May June
Units to produce 26,000 46,000 29,000
Variable overhead rate $ 1.00 $ 1.00 $ 1.00
Variable overhead cost $ 26,000 $ 46,000 $ 29,000
Fixed overhead
Total mfg. overhead cost
Deduct depreciation
Manufacturing overhead - cash

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 Cash
Cash Payments
Payments for
for
Manufacturing
Manufacturing Overhead
Overhead
April May June
Units to produce 26,000 46,000 29,000
Variable overhead rate $ 1.00 $ 1.00 $ 1.00
Variable overhead cost $ 26,000 $ 46,000 $ 29,000
Fixed overhead 50,000 50,000 50,000
Total mfg. overhead cost $ 76,000 $ 96,000 $ 79,000
Deduct depreciation
Manufacturing overhead - cash

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 Cash
Cash Payments
Payments for
for
Manufacturing
Manufacturing Overhead
Overhead
April May June
Units to produce 26,000 46,000 29,000
Variable overhead rate $ 1.00 $ 1.00 $ 1.00
Variable overhead cost $ 26,000 $ 46,000 $ 29,000
Fixed overhead 50,000 50,000 50,000
Total mfg. overhead cost $ 76,000 $ 96,000 $ 79,000
Deduct depreciation 20,000 20,000 20,000
Manufacturing overhead - cash $ 56,000 $ 76,000 $ 59,000

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 Selling
Selling and
and Administrative
Administrative
(S&A)
(S&A) Expense
Expense Budget
Budget

Production Selling
Budget and
Administrative
ed Expense
e t
pl Budget
om
C

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 Selling
Selling and
and Administrative
Administrative
(S&A)
(S&A) Expense
Expense Budget
Budget
 Selling expense budgets contain both
variable and fixed items.
 Variable items: shipping costs and sales
commissions.
 Fixed items: advertising and sales salaries.
 Administrative expense budgets contain
mostly fixed items.
 Executive salaries and depreciation on company
offices.
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 Cash
Cash Payments
Payments for
for
(S&A)
(S&A) Expenses
Expenses
Variable selling and administrative
expenses are $.50 per unit sold and fixed
selling and administrative expenses are
$70,000 per month.
Fixed selling and administrative expenses
include $10,000 in depreciation which does
not require a cash outflow.

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 Cash
Cash Payments
Payments for
for
(S&A)
(S&A) Expenses
Expenses
April May June
Budgeted unit sales 20,000 50,000 30,000
Variable S&A per unit $ 0.50 $ 0.50 $ 0.50
Variable S&A expense $ 10,000 $ 25,000 $ 15,000
Fixed S&A expense 70,000 70,000 70,000
Total S&A expense $ 80,000 $ 95,000 $ 85,000
Deduct depreciation
S&A expense - cash

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 Cash
Cash Payments
Payments for
for
(S&A)
(S&A) Expenses
Expenses
April May June
Budgeted unit sales 20,000 50,000 30,000
Variable S&A per unit $ 0.50 $ 0.50 $ 0.50
Variable S&A expense $ 10,000 $ 25,000 $ 15,000
Fixed S&A expense 70,000 70,000 70,000
Total S&A expense $ 80,000 $ 95,000 $ 85,000
Deduct depreciation 10,000 10,000 10,000
S&A expense - cash $ 70,000 $ 85,000 $ 75,000

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 Cash
Cash Receipts
Receipts Budget
Budget
I have seen a lot of cash
payments but no cash
receipts. Show me some
cash receipts!

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 Cash
Cash Receipts
Receipts Budget
Budget
All
All sales
sales are
are on
on account.
account.
Ellis’s
Ellis’s collection
collection pattern
pattern is:
is:
70
70 percent
percent collected
collected in
in month
month of
of sale
sale
25
25 percent
percent collected
collected in
in month
month after
after sale
sale
55 percent
percent will
will be
be uncollectible
uncollectible
Accounts
Accounts receivable
receivable onon March
March 3131 is
is
$30,000,
$30,000, all
all of
of which
which is
is collectible.
collectible.
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 Cash
Cash Receipts
Receipts Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Price per unit $ 10 $ 10 $ 10
Budgeted sales revenue $ 200,000 $ 500,000 $ 300,000
Receipts from March sales $ 30,000
Receipts from April sales
Receipts from May sales
Receipts from June sales
Total cash receipts

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 Cash
Cash Receipts
Receipts Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Price per unit $ 10 $ 10 $ 10
Budgeted sales revenue $ 200,000 $ 500,000 $ 300,000
Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales
Receipts from June sales
Total cash receipts $ 170,000

April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000

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 Cash
Cash Receipts
Receipts Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Price per unit $ 10 $ 10 $ 10
Budgeted sales revenue $ 200,000 $ 500,000 $ 300,000
Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales 350,000 $ 125,000
Receipts from June sales
Total cash receipts $ 170,000 $ 400,000

April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000

May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000

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 Cash
Cash Receipts
Receipts Budget
Budget
April May June
Budgeted unit sales 20,000 50,000 30,000
Price per unit $ 10 $ 10 $ 10
Budgeted sales revenue $ 200,000 $ 500,000 $ 300,000
Receipts from March sales $ 30,000
Receipts from April sales 140,000 $ 50,000
Receipts from May sales 350,000 $ 125,000
Receipts from June sales 210,000
Total cash receipts $ 170,000 $ 400,000 $ 335,000

April: .70 × $200,000 = $140,000 and .25 × $200,000 = $50,000

May: .70 × $500,000 = $350,000 and .25 × $500,000 = $125,000
June: .70 × $300,000 = $210,000
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Using Excel 2002
 Comprehensive
Comprehensive Cash
Cash Budget
Budget

With just a little

more information
we will be able to
prepare a
comprehensive
cash budget.

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 Comprehensive
Comprehensive Cash
Cash Budget
Budget
Additional
Additional Information
Information
Ellis Magnet Company:
 Has a $100,000 line of credit at its bank, with a zero
balance on April 1.
 Maintains a $30,000 minimum cash balance.
 Borrows at the beginning of a month and repays at the
end of a month.
 Pays interest at 16 percent when a principal payment is
made.
 Pays a $51,000 cash dividend in April.
 Purchases equipment costing $143,700 in May and
$48,800 in June.
 Has a $40,000 cash balance on April 1.
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000
Cash receipts
Cash available
Cash payments:
Materials budget
Labor budget
Manufacturing OH budget
S&A expense budget
Equipment purchases
Dividends
Total cash payments
Balance before financing
Borrowing
Principal repayment
Interest
Ending cash balance
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000
Cash receipts 170,000 400,000 335,000
Cash available $ 210,000
Cash payments:
Materials budget
Labor budget
Manufacturing OH budget
S&A expense budget
Equipment purchases
Dividends
Total cash payments
Balance before financing
Borrowing
Principal repayment
Interest
Ending cash balance
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000
Cash receipts 170,000 400,000 335,000
Cash available $ 210,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700
Labor budget 13,000 23,000 14,500
Manufacturing OH budget 56,000 76,000 59,000
S&A expense budget 70,000 85,000 75,000
Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $ 230,000 $ 400,000 $ 270,000
Balance before financing $ (20,000)
Borrowing
Principal repayment
Interest
Ending cash balance
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $ 210,000 $ 430,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700
Labor budget 13,000 23,000 14,500
Manufacturing OH budget 56,000 76,000 59,000
S&A expense budget 70,000 85,000 75,000
Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $ 230,000 $ 400,000 $ 270,000
Balance before financing $ (20,000) $ 30,000
Borrowing 50,000
Principal repayment 0
Interest 0
Ending cash balance $ 30,000
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $ 210,000 $ 430,000 $ 365,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700
Labor budget 13,000 23,000 14,500
Manufacturing OH budget 56,000 76,000 59,000
S&A expense budget 70,000 85,000 75,000
Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $ 230,000 $ 400,000 $ 270,000
Balance before financing $ (20,000) $ 30,000 $ 95,000
Borrowing 50,000 0
Principal repayment 0 0
Interest 0 0
Ending cash balance $ 30,000 $ 30,000
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 Comprehensive Cash Budget
April May June
Beginning cash balance $ 40,000 $ 30,000 $ 30,000
Cash receipts 170,000 400,000 335,000
Cash available $ 210,000 $ 430,000 $ 365,000
Cash payments:
Materials budget $ 40,000 $ 72,300 $ 72,700
Labor budget 13,000 23,000 14,500
Manufacturing OH budget 56,000 76,000 59,000
S&A expense budget 70,000 85,000 75,000
Equipment purchases 0 143,700 48,800
Dividends 51,000 0 0
Total cash payments $ 230,000 $ 400,000 $ 270,000
Balance before financing $ (20,000) $ 30,000 $ 95,000
Borrowing 50,000 0 0
Principal repayment 0 0 (50,000)
Interest $50,000 × .16 × 3/12
0 = $2,000
0 (2,000)
Ending cash balance $ 30,000 $ 30,000 $ 43,000
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 The
The Budgeted
Budgeted
Income
Income Statement
Statement

Cash Budgeted
Budget Income
e d Statement
le t
p
om
C

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 The
The Budgeted
Budgeted
Income
Income Statement
Statement
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30

Sales (100,000 units @ $10) $ 1,000,000

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 The
The Budgeted
Budgeted
Income
Income Statement
Statement
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30

Sales (100,000 units @ $10) $ 1,000,000

Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000

Computation of unit cost follows

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 The
The Budgeted
Budgeted
Income
Income Statement
Statement
Production costs per unit Quantity Cost Total
Direct materials 5.00 lbs. $ 0.40 $ 2.00
Direct labor 0.05 hrs. $ 10.00 0.50
Manufacturing overhead 0.05 hrs. $ 49.70 2.49
Total unit cost $ 4.99

Total mfg. OH for quarter $251,000 = $49.70 per hr.

Total labor hours required 5,050 hrs.
From labor and Mfg. OH budgets
Labor Hours Mfg. OH
Manufacturing
April 1,300 $ 76,000
May 2,300 96,000 overhead is applied
June 1,450 79,000 based on
Total 5,050 $ 251,000 direct labor hours.

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 The
The Budgeted
Budgeted
Income
Income Statement
Statement
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30

Sales (100,000 units @ $10) $ 1,000,000

Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000
Selling and administrative expenses 260,000
Operating income $ 241,000
From S&A Expense Budget
April $ 80,000
May 95,000
June 85,000
Total $ 260,000
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 The
The Budgeted
Budgeted
Income
Income Statement
Statement
Ellis Magnet Company
Budgeted Income Statement
For the Three Months Ended June 30

Sales (100,000 units @ $10) $ 1,000,000

Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin $ 501,000
Selling and administrative expenses 260,000
Operating income $ 241,000
Interest expense 2,000
Net income $ 239,000

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 The
The Budgeted
Budgeted
Balance
Balance Sheet
Sheet

Budgeted
Income Budgeted
Statement Balance
Sheet
d
e
et
pl
m
Co

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 The
The Budgeted
Budgeted
Balance
Balance Sheet
Sheet

Ellis
Ellis reports
reports the
the following
following account
account balances
balances
on
on June
June 30,
30, prior
prior to
to preparing
preparing its
its budgeted
budgeted
financial
financial statements:
statements:
 Land - $50,000
Land - $50,000
 Building (net) - $174,500
Building (net) - $174,500
 Common stock - $200,000
Common stock - $200,000
 Equipment (net) - $192,500
Equipment (net) - $192,500
 Retained earnings - $148,150
Retained earnings - $148,150
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 Ellis Magnet Company
Budgeted Balance Sheet 25% of June
June 30, 2002 sales of
Current assets $300,000
Cash $ 43,000
Accounts receivable 75,000 11,500 lbs.
Raw materials inventory 4,600
@ $.40 per lb.
Finished goods inventory 24,950
Total current assets $ 147,550
Property and equipment
Land $ 50,000
5,000 units
Building 174,500 @ $4.99 each
Equipment 192,500
Total property and equipment $ 417,000
Total assets $ 564,550 50% of June
Liabilities and Equities
purchases
Accounts payable $ 28,400 of $56,800
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities $ 564,550
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 Ellis Magnet Company
Budgeted Balance Sheet
June 30, 2002
Current assets
Cash $ 43,000
Accounts receivable 75,000
Raw materials inventory 4,600
Finished goods inventory 24,950
Total current assets $ 147,550
Property and equipment
Beginning balance $ 148,150
Land $ 50,000
Add: net income
Building 239,000 174,500
Deduct: dividends
Equipment (51,000) 192,500
Ending balance
Total property and$ 336,150
equipment $ 417,000
Total assets $ 564,550

Liabilities and Equities

Accounts payable $ 28,400
Common stock 200,000
Retained earnings 336,150
Total liabilities and equities $ 564,550
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 End
End &
& Thankyou
Thankyou
I would be happy to assist
you with your cash budget!

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