Reference no: EM13478654

Juicers Inc produces multiple fruit juices for the Caribbean market. You have been given responsibility forall planning and budgeting. The next operational planning meeting is two weeks away and they would likea master budget prepared for the next three months on the planning horizon. The accounting department hasprovided the following information. The company has a requirement that minimum cash balance of $40,000 each month. The juices are sold at$8 per liter. Recent forecast sales in units are as follows:January (actual) 80,000 June 240,000February (actual) 96,000 July 160,000March (actual) 112,000 August 144,000April 140,000 September 128,000May 180,000The large build up in sales before and up to the month of June is in preparation for the annual carnival.Ending inventories are supposed to be 80% of the next month sales in units. The juices cost $ 5. per unit toproduce.Purchases are paid for as follows, 50% in the month of purchase and the remaining 50% in the followingmonth. All sales are on credit with no discounts. The cash from the collection of sales is as follows, 25% iscollected in the month of sale, 50% one month later and the remaining 25% is collected 2 months after sale.The other operating expenses are as follows:VariableSales commissions $1 per juiceFixedSalaries and wages $88,000Utilities 56,000Insurance expired 4,800Depreciation 6,000Miscellaneous 12,000All operating expenses are paid in the month in cash except depreciation and insurance expired. Land ispurchased in May for $100,000. The company pays dividends the first month of each quarter of $48,000which were declared in the last month of the previous quarter. The unaudited balance sheet at the end of thelast quarter which ended March 31st 2012 is shown below.2AssetsCash $ 56,000Accounts receivable ($192,000 of February sales,$672,000 of March sales)864,000Inventory (126,000 units) 630,000Unexpired Insurance 57,600Fixed Assets (net of depreciation) 690,800Total Assets $2,298,400Liabilities and Stockholders' EquityAccounts payable purchases 343,000Dividend payable 48,000Capital stock 1,200,000Retained Earnings 707,400Total Liabilities and Stockers' equity $2,298,400The company can borrow money at 12% per annum interest rate. All borrowings must be at the beginningof the month and all repayments occur at the end of the month. Borrowing and repayment of principal mustbe in increments of $1,000.Prepare a master budget for the three months period ended June 30th 2012, including the following detailedbudgets:1. a) Sales budget by month and in totalb) A schedule of expected sales collection from sales and accounts receivable by month and intotalc) A purchases budget in units and in dollars. Show the budget by month and in total.d) A schedule of budgeted cash disbursement for purchases by month and in total.2. A cash budget. Show the budget by month and in total.3. A budgeted income statement for the three month period ended June 30th 2012. Use thecontribution margin format.4. A budgeted balance sheet as at June 30th 2012.