Problem
Thumbtack's March 31, 2012, budgeted balance sheet follows:
THUMBTACK OFFICE SUPPLY
Budgeted balance Sheet
March 31, 2012
Assets Liabilities
Current: Current:
Cash $ 18,000 Accounts due $ 12,500
Accounts receivable 12,000 Salary and commissions due 1,400
Stock 16,000 Total present debts $ 13,900
Prepaid insurance 2,200
Total present assets $ 48,200 Shareholders' Equity
Factory assets: Ordinary shares $ 16,000
Machines and fixtures 45000 Retained earings 33,300
Less: Accmulated Depreciation 30,000 Total shareholders' equity 49,300
Total factory assets 15,000 Total debts and Total assets $63,200 shareholders' equity $ 63,200
The budget committee of Thumbtack Office Supply has collected the following data.
• Sales in April were $40,000. You predict that per month sales will enhance 2% over April's sales in May. June's sales will enhance 4% over April's sales. July's sales will enhance 20% over April's sales. Collections are 80% during the month of sale and 20% during the month after sale.
• Thumbtack keeps stock of $11,000 plus 25% of the COGS budgeted for the next month. COGS = 50% of sales income. Purchases are paid 30% during the month of purchase and 70% in the month after the purchase.
• Monthly wages add up to $7,000. Sales commissions equal 5% of sales for that month. Wages and commissions are paid 30% in the month incurred and 70% in the next month.
• Other monthly expenditures are listed below:
Rent expenditure $2,400 paid as accrued
Depreciation expenditure $ 200
Insurance expenditure $100, expiration of prepaid sum
Income tax 20% of operating revenue, paid as incurred
Requirements
• Prepare Thumbtack's sales budget for April and May, 2012. Round all amounts to the nearest $1.
• Prepare Thumbtack's inventory, purchases, and cost of goods sold budget for April and May.
• Prepare Thumbtack's operating expenses budget for April and May.
• Prepare Thumbtack's budgeted income statement for April and May.
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.