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Nordic Company
a. & b. Data Section

Sales on Credit 0.8

Sales Forecast Equipment Purchases
March $60,000
April $70,000 April $11,500
May $85,000 May $3,000
June $90,000 June $0
July $50,000
Cost of Goods Sold Rate 0.60 Dividends $3,500

Ending Inventory Requirement 0.3

Variable Expenses 0.1

Fixed Expenses $13,500
Depreciation Expense $2,000 per quarter $6,000

Beginning Balance Sheet

Cash $9,000
Accounts Receivable 48,000
Inventory 12,600 Accounts Payable $18,300
PP&E 214,100 Common Stock 190,000
Accumulated Depreciation 0 Retained Earnings 75,400
$283,700 $283,700

Master Budget Section

Level A: Sales Budget

March April May Total
Sales $70,000 $85,000 $90,000 $245,000
Sales on Account $56,000 $68,000 $72,000 $196,000
Cash Sales $14,000 $17,000 $18,000 $49,000
Accounts Receivable Collection $48,000 $56,000 $68,000 $172,000
Cash Collections $62,000 $73,000 $86,000 $221,000

Level A-1: Cost of Sales Budget

Cost of Goods Sold $42,000 $51,000 $54,000 $147,000

Level B: Purchases Budget

Cost of Sales Needs $42,000 $51,000 $54,000 $147,000

Ending Inventory Requirement $15,300 $16,200 $9,000 $9,000
Total Needs $57,300 $67,200 $63,000 $156,000
Beginning Inventory $12,600 $15,300 $16,200 $12,600
Purchases $44,700 $51,900 $46,800 $143,400

Cash Payments $40,650 $48,300 $49,350 $138,300

Level C: Operating Exp Budget

Variable Expenses $7,000 $8,500 $9,000 $24,500

Fixed Expenses $13,500 $13,500 $13,500 $40,500
Total Cash Expenses $20,500 $22,000 $22,500 $65,000
Depreciation $2,000 $2,000 $2,000 $6,000
Total Expenses $22,500 $24,000 $24,500 $71,000

Level D: Capital Budget

Equipment $11,500 $3,000 $0 $14,500

Level E: Cash Budget

Beginning Balance $9,000 $8,350 $8,050 $9,000

CollectionsA $62,000 $73,000 $86,000 $221,000

Payments B $40,650 $48,300 $49,350 $138,300

C $20,500 $22,000 $22,500 $65,000
D $11,500 $3,000 $0 $14,500
Total Payments $72,650 $73,300 $71,850 $217,800
Cash Change ($10,650) ($300) $14,150 $3,200
Borrowing $10,000 $10,000
Payment $10,000 $10,000
Interest Payment $300 $300
Dividends ($3,500) ($3,500)
Ending Balance $8,350 $8,050 $8,400 $8,400
 Financial Statements

Nordic Company Nordic Copmpany

Income Statement Balance Sheet
for the Quarter Ending June 30, 20X1 June 30, 20X1

Sales $245,000 Assets

Cost of Sales $147,000 Cash $8,400
Gross Margin $98,000 Accounts Receivable $72,000
Inventory $9,000
Interest Expense $300
Operating Expenses $71,000 PP&E 222,600
Net Income $26,700 Accumulated Depreciation $0
Dividends ($3,500) Total Assets $312,000
Beginning Retained Earnings $75,400
Ending Retained Earnings $98,600
g on the cells.
Nordic Copmpany
Balance Sheet
June 30, 20X1

Liabilities and Equity

Accounts Payable $23,400

Note Payable $0
Common Stock $190,000
Retained Earnings $98,600
Total Equities $312,000