Name(s)

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 $ 150 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 30%

Month following sale 60%
Second month following sale 10% 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
Rent $ 72,000
Salaries $ 1,060,000 plus 10% of sales Accounts payable (for product purchases) 5,220,000
Utilities $ 7,000 Dividends payable 25,000
Insurance $ 10,000 Common Stock 2,000,000
Depreciation $ 14,000 Retained earnings 3,555,900
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 8% 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 $ 5,220,000 5,220,000
Selling price per unit $300 $300 $300 $300 July purchases 5,475,000 5,475,000 10,950,000
Total sales $ 22,500,000 24,000,000 22,500,000 69,000,000 August purchases 5,850,000 5,850,000 11,700,000
September purchases 5,175,000 5,175,000
Schedule of Expected Cash Collections Total cash payments $ 10,695,000 11,325,000 11,025,000 33,045,000
Cash from: July August September Quarter
May sales 5,400,000 $ 540,000 540,000 Cash Budget
June sales 4,500,000 2,700,000 450,000 3,150,000 July August September Quarter
July Sales 6,750,000 13,500,000 2,250,000 22,500,000 Beginning cash balance $ 250,000 250,000 4,966,000 250,000
August sales 7,200,000 14,400,000 21,600,000 Add collections from customers 9,990,000 21,150,000 23,400,000 54,540,000
September sales 6,750,000 6,750,000 Total cash available 10,240,000 21,400,000 28,366,000 54,790,000
Total cash collections $ 9,990,000 21,150,000 23,400,000 54,540,000 Lee: cash disbursements
Merchandise purchases 10,695,000 11,325,000 11,025,000 33,045,000
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 86,000 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 34,000 32,000 30,000 96,000 Insurance 10,000 10,000 10,000 30,000
Required purchases 73,000 78,000 69,000 220,000 Equipment purchases 100,000 100,000
Unit cost $ 150 150 150 150 Dividends paid 25,000 25,000
Required dollar purchases $ 10,950,000 11,700,000 10,350,000 33,000,000 Total cash disbursements 15,519,000 16,434,000 15,824,000 47,777,000
Excess cash available over disbursements (5,279,000) 4,966,000 12,542,000 7,013,000
Financing:
Borrowings 5,529,000 5,529,000
Repayments (5,529,000) (5,529,000)
Interest (110,580) (110,580)
Total financing 5,529,000 0 (5,639,580) (110,580)
Ending cash balance $ 250,000 4,966,000 6,902,420 6,902,420

Tasers, Inc. Tasers, Inc.

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

Sales $ 69,000,000 Assets

Variable expenses:
Cost of goods sold 34,500,000 Cash $ 6,902,420
Salaries 6,900,000 Accounts receivable 18,957,900
Commissions 2,760,000 44,160,000 Inventory 3,600,000
Patents 3,000
Contribution margin 24,840,000 Property and equipment (net) 1,008,000
Fixed expenses: Total assets $ 30,471,320
Advertising 1,500,000
Rent 216,000 Liabilities and Stockholders' Equity
Salaries 10,080,000
Utilities 21,000 Accounts payable (for product purchases) $ 5,175,000
Insurance 30,000 Dividends payable 25,000
Depreciation 42,000 Common Stock 2,000,000
11,889,000 Retained earnings 16,371,320
Net operating income (EBIT) 12,951,000 Total liabilities and stockholders' equity $ 23,571,320
Interest expense (110,580)
Earnings before taxes (EBT) $ 12,840,420