Katherine, Zack

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 sellin
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 yea
has experienced a cash shortage.
Because you are well trained in budgeting as a result of your having taken ACC 240 at Nichols Coll
you have decided to prepare comprehensive budgets for the upcoming second quarter to show ma
the benefits that can be realized from an integrated budgeting program. To this end, you have wo
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

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

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
Month following sale
Second month following sale
Bad debts are negligible.

Monthly operating expenses are as follows:

Variable:
Sales commissions 4% of sales

Fixed: $
Advertising $ 500,000
Rent $ 72,000
Salaries $ 1,060,000 plus 10%
Utilities $ 7,000
Insurance $ 10,000
Depreciation $ 14,000
The company plans to make equipment purchases this year as follows:

$
August $ 100,000
November $ 100,000

The company declares a dividend at the end of each quarter payable in the first month of the
of the following quarter of $25,000

Sales B
July
Budgeted unit sales 75,000
Selling price per unit $300
Total sales $ 22,500,000

Schedule of Expect
Cash from: July
May sales 5,400,000 $ 1,080,000
June sales 4,500,000 1,350,000
July Sales 11,250,000
August sales
September sales
Total cash collections $ 13,680,000

Merchandise Pu
July
Budgeted unit sales 75,000
Add: desired ending inventory 32,000
Total needs 107,000
Less: Beginning merchandise inventory 6/30/2015 35,172
Required purchases 71,828
Unit cost $ 145
Required dollar purchases $ 10,415,000

Budgeted Income Statement

For the quarter ending 9/30/2015

Sales
Variable expenses:
 Cost of goods sold
Salaries
Commissions

Contribution margin
Fixed expenses:
Advertising
Rent
Salaries
Utilities
Insurance
Depreciation

Net operating income (EBIT)

Interest expense
Earnings before taxes (EBT)

CVP Analysis
Contribution Margin/ unit 113.00
Contribution Margin ratio 0.38
Operating Leverage 5.21
What is the break even # of units for the quarter 44,150
heet

esaler of tasers selling

certain times the year

C 240 at Nichols College,

d quarter to show management
his end, you have worked
esented below.

$ 300 each

x months are:
Basis Cash Disbursments must imput .5
budget
budget
budget
budget

ear kicks in.

determined

per unit. Purchases in any month

ales are on account

50%
30%
20% Tasers, Inc.
Balance Sheet
30-Jun-15

Cash
Accounts receivable
Inventory
Patents (not amortized)
Property and equipment (net)
Total assets

of sales Accounts payable (for product purchases)

Dividends payable
Common Stock
Retained earnings
Total liabilities and stockholders' equity
 Other information:

The company desires to maintain a minimum cash

All borrowings are made at the beginning of the m
The interest rate charged by the bank is
Repayments of principal plus accrued interest will
rst month of the owed (plus interest) can be repaid. Any interest un
and the related expense and liability reported app
the bank at the end of the quarter will be reported

Sales Budget Budgete

August September Quarter
80,000 75,000 230,000 Accounts payable $
$300 $300 $300 July purchases
### 22,500,000 ### August purchases
September purchases
Schedule of Expected Cash Collections Total cash payments $
August September Quarter
1,080,000
900,000 2,250,000
6,750,000 4,500,000 22,500,000 Beginning cash balance $
12,000,000 7,200,000 19,200,000 Add collections from customers
11,250,000 11,250,000 Total cash available
19,650,000 22,950,000 56,280,000 Lee: cash disbursements
Merchandise purchases
Merchandise Purchases Budget Advertising
August September Quarter Rent
80,000 75,000 230,000 Salaries
30,000 24,000 24,000 Commissions
110,000 99,000 316,000 Utilities
32,000 30,000 35,172 Insurance
78,000 69,000 218,828 Equipment purchases
145 145 145 Dividends paid
11,310,000 10,005,000 31,730,000 Total cash disbursements
Excess cash available over disbursemen
Financing:
Borrowings
Repayments
Interest
Total financing
Ending cash balance $

Tasers, Inc.
Balance Sheet
9/30/2015

$ 69,000,000 Assets
 ### Cash
6,900,000 Accounts receivable
2,760,000 43,010,000 Inventory
Patents
25,990,000 Property and equipment (net)
Total assets
1,500,000
216,000 Liabilities and Stockholders
* 3,180,000
21,000 Accounts payable (for product purchases)
30,000 Dividends payable
42,000 Common Stock
4,989,000 Retained earnings
21,001,000 Total liabilities and stockholders' equity
16,304
$ 20,984,696
 Tasers, Inc.
Balance Sheet
30-Jun-15

250,000
4,497,900
5,100,000
3,000
950,000
10,800,900

purchases) 5,046,000
25,000
2,000,000
3,729,900
tockholders' equity 10,800,900
 ain a minimum cash balance of $ 250,000
e beginning of the month and repaid at the end of the month.
7% per annum.
accrued interest will occur in the month when the entire amount
paid. Any interest unpaid at the end of a quarter must be accrued
iability reported appropriately. Any principal amount owing to
arter will be reported as notes payable on the balance sheet.

Budgeted Cash Disbursements for Merchandise Purchases

July August September Quarter
5,046,000 5,046,000
5,207,500 5,207,500 10,415,000
5,655,000 5,655,000 11,310,000
5,002,500 5,002,500
10,253,500 10,862,500 10,657,500 31,773,500

Cash Budget
July August September Quarter
250,000 250,000 2,514,696 250,000
13,680,000 19,650,000 22,950,000 56,280,000
13,930,000 19,900,000 25,464,696 ###

10,253,500 10,862,500 10,657,500 31,773,500

500,000 500,000 500,000 1,500,000
72,000 72,000 72,000 216,000
3,310,000 3,460,000 3,310,000 10,080,000
900,000 960,000 900,000 2,760,000
7,000 7,000 7,000 21,000
10,000 10,000 10,000 30,000
100,000 100,000
25,000 25,000
15,077,500 15,971,500 15,456,500 46,505,500
(1,147,500) 3,928,500 10,008,196 ###

(1,397,500) ###
1,397,500 1,397,500
16,304 16,304
(1,397,500) 1,413,804 0 16,304
250,000 2,514,696 10,008,196 ###

Tasers, Inc.
Balance Sheet
9/30/2015

Assets
 $ 10,008,196
17,217,900
3,480,000
3,000
1,008,000
$ 31,717,096

s and Stockholders' Equity

purchases) $ 5,002,500
25,000
2,000,000
24,689,596
tockholders' equity $ 31,717,096