ACG3073-WEEK 12-CHAPTER ASSIGNMENT ABC Company is preparing its master budget for the first quarter of its calendar year. The following forecasted data relate to the first quarter:

FINANCIAL ACCOUNTING
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ISBN:9781259964947
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Chapter1: Financial Statements And Business Decisions
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ABC Company is preparing its master budget for the first quarter of its calendar year. The
following forecasted data relate to the first quarter:
Unit sales:
January
February
March
Unit sales price
Cost of goods sold per unit
Operating Expenses:
Commissions
Rent
Advertising
Office salaries
Depreciation
ACG3073-WEEK 12-CHAPTER ASSIGNMENT
Interest
Tax rate
40,000
55,000
45,000
$25
$15
11% of sales
$28,500/month
15% of sales
$80,000/month
$50,500/month
15% annually on a $230,000 note payable
35%
Required:
1. Prepare a budgeted income statement for this first quarter.
2. Does it appear that ABC's Company will remain solvent, or could it be heading for a
cash crisis?
3. What suggestions can you make to help Osborn improve her company's cash flow?
Transcribed Image Text:ABC Company is preparing its master budget for the first quarter of its calendar year. The following forecasted data relate to the first quarter: Unit sales: January February March Unit sales price Cost of goods sold per unit Operating Expenses: Commissions Rent Advertising Office salaries Depreciation ACG3073-WEEK 12-CHAPTER ASSIGNMENT Interest Tax rate 40,000 55,000 45,000 $25 $15 11% of sales $28,500/month 15% of sales $80,000/month $50,500/month 15% annually on a $230,000 note payable 35% Required: 1. Prepare a budgeted income statement for this first quarter. 2. Does it appear that ABC's Company will remain solvent, or could it be heading for a cash crisis? 3. What suggestions can you make to help Osborn improve her company's cash flow?
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