Name(s) Milica & Matt Cornelius

Common Data Spreadsheet

ACC 240 Budget Project Spring 2017

You have just been hired as a new management trainee by Tasers, Inc. a wholesaler of tasers selling
only to a variety of law enforcement agencies across the U.S.
In the past, the company has done very little in the way of budgeting and at certain times the year
has experienced a cash shortage.
Because you are well trained in budgeting as a result of your having taken ACC 240 at Nichols College,
you have decided to prepare comprehensive budgets for the upcoming second quarter to show management
the benefits that can be realized from an integrated budgeting program. To this end, you have worked
with accounting and other areas of the company to gather the information presented below.

The company sell many styles of taser but they all currently sell at wholesale for $ 300 each

Actual unit sales for the last three months and budgeted sales for the next six months are:
Units Basis Units Basis
April 20000 actual September 75000 budget
May 18000 actual October 60000 budget
June 15000 actual November 55000 budget
July 75000 budget December 50000 budget
August 80000 budget

Sales pick up after June 30 government agencies' new budget for the fiscal year kicks in.

Sufficient inventory needs to be on hand at the end of each month and that is determined
to be 40% of next month's sales.

The cost of each taser from the manufacturer is $ 145 per unit. Purchases in any month
are paid 50% in the month of purchase and 50% in the following month. All sales are on account
n/30 but experience shows customers on average pay as follows:

Month of sale 50%

Month following sale 30%
Second month following sale 20% Tasers, Inc.
Bad debts are negligible. Balance Sheet
30-Jun-15
Monthly operating expenses are as follows:
Cash 250,000
Variable: Accounts receivable 4,497,900
Sales commissions 4% of sales Inventory 5,100,000
Patents (not amortized) 3,000
Fixed: $ Property and equipment (net) 950,000
Advertising $ 500,000 Total assets 10,800,900 Req. $ purchases
Rent $ 72,000 $31,730,000
Salaries $ 1,060,000 plus 10% of sales Accounts payable (for product purchases) 5,046,000
Utilities $ 7,000 Dividends payable 25,000
Insurance $ 10,000 Common Stock 2,000,000
Depreciation $ 14,000 Retained earnings 3,729,900
Total liabilities and stockholders' equity 10,800,900

The company plans to make equipment purchases this year as follows: Other information:

$ The company desires to maintain a minimum cash balance of $ 250,000

August $ 100,000 All borrowings are made at the beginning of the month and repaid at the end of the month.
November $ 100,000 The interest rate charged by the bank is 7% per annum.
Repayments of principal plus accrued interest will occur in the month when the entire amount
The company declares a dividend at the end of each quarter payable in the first month of the owed (plus interest) can be repaid. Any interest unpaid at the end of a quarter must be accrued
of the following quarter of $25,000 and the related expense and liability reported appropriately. Any principal amount owing to
the bank at the end of the quarter will be reported as notes payable on the balance sheet.

Sales Budget Budgeted Cash Disbursements for Merchandise Purchases

July August September Quarter July August September Quarter
Budgeted unit sales 75,000 80,000 75,000 230,000 Accounts payable $ 5,046,000 5,046,000
Selling price per unit $300 $300 $300 $300 July purchases 5,207,500 5,207,500 10,415,000
Total sales $ 22,500,000 24,000,000 22,500,000 69,000,000 August purchases 5,655,000 5,655,000 11,310,000
 September purchases 5,002,500 5,002,500
Schedule of Expected Cash Collections Total cash payments $ 10,253,500 10,862,500 10,657,500 31,773,500
Cash from: July August September Quarter
May sales 5,400,000 $ 1,080,000 1,080,000 Cash Budget
June sales 4,500,000 1,350,000 900,000 2,250,000 July August September Quarter
July Sales 22,500,000 11,250,000 6,750,000 4,500,000 22,500,000 Beginning cash balance $ 250,000 250,000 3,928,500 250,000
August sales 24,000,000 12,000,000 7,200,000 19,200,000 Add collections from customers 13,680,000 19,650,000 22,950,000 56,280,000
September sales 22,500,000 11,250,000 11,250,000 Total cash available 13,930,000 19,900,000 26,878,500 56,530,000
Total cash collections $ 13,680,000 19,650,000 22,950,000 56,280,000 Lee: cash disbursements
Merchandise purchases 10,253,500 10,862,500 10,657,500 31,773,500
Merchandise Purchases Budget Advertising 500,000 500,000 500,000 1,500,000
July August September Quarter Rent 72,000 72,000 72,000 216,000
Budgeted unit sales 75,000 80,000 75,000 230,000 Salaries 3,310,000 3,460,000 3,310,000 10,080,000
Add: desired ending inventory 32,000 30,000 24,000 72 Commissions 900,000 960,000 900,000 2,760,000
Total needs 107,000 110,000 99,000 316,000 Utilities 7,000 7,000 7,000 21,000
Less: Beginning merchandise inventory 6/30/2015 35,172 32,000 30,000 97,172 Insurance 10,000 10,000 10,000 30,000
Required purchases 71,828 78,000 69,000 218,828 Equipment purchases 100,000 100,000
Unit cost $ 145 145 145 145 Dividends paid 25,000 25,000
Required dollar purchases $ 10,415,000 11,310,000 10,005,000 31,730,000 Total cash disbursements 15,077,500 15,971,500 15,456,500 46,505,500
Excess cash available over disbursements (1,147,500) 3,928,500 11,422,000 10,024,500
Financing:
Borrowings 1,397,500 1,397,500
Repayments (1,397,500) (1,397,500)
Interest (24,456) (24,456)
Total financing 1,397,500 0 (1,421,956) (24,456)
Ending cash balance $ 250,000 3,928,500 10,000,044 10,000,044

Tasers, Inc. Tasers, Inc.

Budgeted Income Statement Balance Sheet
For the quarter ending 9/30/2015 9/30/2015

Sales $ Assets
Variable expenses:
Cost of goods sold Cash $
Salaries Accounts receivable
Commissions Inventory
Patents
Contribution margin Property and equipment (net)
Fixed expenses: Total assets $
Advertising
Rent Liabilities and Stockholders' Equity
Salaries
Utilities Accounts payable (for product purchases) $
Insurance Dividends payable
Depreciation Common Stock
Retained earnings
Net operating income (EBIT) Total liabilities and stockholders' equity $
Interest expense
Earnings before taxes (EBT) $