Gulf Trading Company's management asks you to prepare its master budget using the following information. The budget is to cover the months April, May and June 2013

1) Sales for March total 10,000 units. Each month's sales are expected to exceed the prior month's results by 5%.The product's selling price is $25 per unit

2) Company policy calls for a given month's ending inventory to equal 80% of the next month's expected unit sales. The March31 inventory is 8,400 units which comply with the policy. The purchase price is $ i 5 per unit.

3) Sales representatives' commissions are 12.5% of sales and are paid in the month of sales. The sales manager monthly salary will be $3,500 in April and $4,000 per month thereafter.

4) Monthly general and administrative expenses include $8.000 administrative salaries, $5,000 depreciation and 0.9% monthly interest on the long term note payable

5) The company expects 30% of sales to be for cash and the remaining 70% on credit .Receivables are collected in full in the month following the sale ( none is collected in the month of sale)

6) All merchandise purchases are on credit and no payables arise from any other transaction. One month's purchases are fully paid in the next month.

7) The minimum ending cash balance for all months is $50,000. If necessary, the company borrows enough cash using a short term note to reach the minimum. Short term notes require an interest payment of 1% at each month end (Before any repayment),If the ending cash balance exceeds the minimum; the excess will be applied to repaying the short term notes payable.

8) Dividends of $100,000 are to be declared and paid in. May

9) Equipment purchases of $55,000 are scheduled for June.

Required:-

Prepare the following budgets and other financial information required:-

1) Sales budget including budgeted sales for July

2) Purchases budget ,the budgeted cost of goods sold for each month and quarter, and the cost of the June 30 budgeted inventory

3) Selling expense budget

4) General and Administrative expense budget

5) Expected cash receipts from customers and the expected June 30 balance of Accounts Receivable

6) Expected cash payments for purchases and the expected June 30 balance of Accounts Payable

7) Cash Budget

8) Budgeted Income Statement