Project #92327 - Master Budget


Required:  Prepare a master budget for Bobcat Boutique for the second quarter of 2016.  The following component budgets must be included:


  1. Sales Budget

  2. Cost of Goods Sold, Inventory and Purchases Budget

  3. Operating Expense Budget

  4. Budgeted Income Statement

  5. Schedule of Expected Cash Collections

  6. Schedule of Expected Cash Disbursements - Merchandise Purchases

  7. Schedule of Expected Cash Disbursements - Operating Expenses

  8. Combined Cash Budget

  9. Budgeted Balance Sheet





ACC 2362 Managerial Accounting:  Excel Project #3 – Chap. 9 – Master Budget – Merchandising Company


Bobcat Boutique is a merchandising business located downtown in San Marcos, Texas.  The owners are Texas State alumni and they would like to maximize their profits.  They understand that accurate budgeting will help obtain this goal.  The company is completing its second year of operations and is preparing to build its master budget for the second quarter.  The budget will detail each quarter’s activity and the total for the quarter.  The master budget will be based on the following information:


  1. Sales were budgeted at $50,000 for March.   Expected sales are $60,000 for April, $72,000 for May, $90,000 for June, and $48,000 for July.


  2. The gross margin is 25% of sales.


  3. Sales are projected to be 60% for cash and 40% on credit.  Credit sales are collected in the month following the sale.  The March accounts receivable are a result of the March credit sales. There are no bad debts.


  4. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.


  5. One half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in the following month.  The accounts payable at March 31 are the result of March purchases of inventory.


  6. Monthly operating expenses are as follows:  commissions are 12% of sales; rent is $2,500 per month, other operating expenses (excluding depreciation) are 6% of sales. Assume these expenses are paid monthly.  Deprecation is $900 per month. 


  7. Equipment costing $1,500 will be purchased for cash in April.


  8. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month.  The boutique has an agreement with a local bank that allows them to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000.  The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded.  They would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.


  9. The balance sheet as of March 31, is as follows:




March 31



Accounts Receivable




Plant & Equipment, net


  Total assets




Liabilities & Equity


Accounts Payable


Retained  Earnings


  Total liabilities & equity





Subject Mathematics
Due By (Pacific Time) 11/11/2015 12:00 am
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