In: Accounting
Quaint Stem Company is a high-end glassware manufacturer that produces fine stemware of the highest quality. The company is completing its fourth year of operations and is preparing to build its master budget for the coming year (2020). The budget will detail each quarter’s activity and the activity for the year in the total. The master budget will be based on the following information:
First quarter 66,000
Second quarter 68,000
Third quarter 75,000
Fourth quarter 85,000
The selling price is $86 per unit. Cash sales make up 25% of all sales. Quaint collects 75 percent of the credit sales within the quarter in which they are realized; the other 25 percent are collected in the following quarter. There are no bad debts.
ASSETS LIABILITIES and STOCKHOLDERS’EQUITY
Cash $ 52,000 Accounts Payable $ 680,000
Accounts Receivable 1,275,000
Raw Materials Inventory 124,800
Finished Goods Inventory 656,500 Capital Stock 9,750,000
Plant and equipment, net 9,360,000 Retained Earnings 1,038,300 Total Assets $11,468,300 Total Liab. & Equity $11,468,300
Required
Prepare a master budget for Quaint Stem Company for each quarter of 2019 and for the year in total. The following component budgets must be included: