Thumbtack’s March 31, 2012, budgeted balance sheet follows:
THUMBTACK OFFICE SUPPLY
Budgeted balance Sheet
March 31, 2012
Assets Liabilities
Current: Current:
Cash $ 18,000 Accounts due $ 12,500
Accounts receivable 12,000 Salary and commissions due 1,400
Stock 16,000 Total present debts $ 13,900
Prepaid insurance 2,200
Total present assets $ 48,200 Shareholders’ Equity
Factory assets: Ordinary shares $ 16,000
Machines and fixtures 45000 Retained earings 33,300
Less: Accmulated Depreciation 30,000 Total shareholders’ equity 49,300
Total factory assets 15,000 Total debts and
Total assets $63,200 shareholders’ equity $ 63,200
The budget committee of Thumbtack Office Supply has collected the following data.
a. Sales in April were $40,000. You predict that per month sales will enhance 2% over April’s sales in
May. June’s sales will enhance 4% over April’s sales. July’s sales will enhance 20% over April’s sales.
Collections are 80% during the month of sale and 20% during the month after sale.
b. Thumbtack keeps stock of $11,000 plus 25% of the COGS budgeted for the next
month. COGS = 50% of sales income. Purchases are paid 30% during the month of purchase and 70%
in the month after the purchase.
c. Monthly wages add up to $7,000. Sales commissions equal 5% of sales for that month. Wages
and commissions are paid 30% in the month incurred and 70% in the next month.
d. Other monthly expenditures are listed below:
Rent expenditure $2,400 paid as accrued
Depreciation expenditure $ 200
Insurance expenditure $100, expiration of prepaid sum
Income tax 20% of operating revenue, paid as incurred
Requirements
1. Prepare Thumbtack’s sales budget for April and May, 2012. Round all amounts
to the nearest $1.
2. Prepare Thumbtack’s inventory, purchases, and cost of goods sold budget for
April and May.
3. Prepare Thumbtack’s operating expenses budget for April and May.
4. Prepare Thumbtack’s budgeted income statement for April and May.
