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Based on the case study you uploaded, the task is to create a master budget for the SPD division of Allteq Solutions for the quarter ending June 30, 2024. The required budgets and financial statements involve sales forecasts, cash collections, merchandise purchases, and other financial projections. Here's an outline to guide your preparation of the master budget:

### 1. **Sales Budget:**
   - Forecasted sales units for April to June:
     - April: 38,000 units
     - May: 65,000 units (increase due to Mother’s Day)
     - June: 50,000 units
   - Each SPD unit sells for $30.

   **Total Sales:**
   - April: 38,000 × $30 = $1,140,000
   - May: 65,000 × $30 = $1,950,000
   - June: 50,000 × $30 = $1,500,000
   - **Total sales for the quarter:** $4,590,000

### 2. **Schedule of Expected Cash Collections:**
   Cash collections are based on the collection policy (25% in the month of sale, 50% in the next month, and 25% in the second month after the sale):
   - **April:** 25% of April sales + 50% of March sales + 25% of February sales.
   - **May:** 25% of May sales + 50% of April sales + 25% of March sales.
   - **June:** 25% of June sales + 50% of May sales + 25% of April sales.

### 3. **Merchandise Purchases Budget:**
   - Cost per SPD: $14
   - Ending inventory requirement: 90% of the next month's sales.
   - Ending inventory for April is 90% of May's sales (65,000 × 0.9 = 58,500 units).
   - Purchases for each month will be determined by balancing the production needs with the beginning inventory and the required ending inventory.

### 4. **Schedule of Cash Disbursements for Merchandise Purchases:**
   Payments are split 50% in the month of purchase and 50% in the following month.

### 5. **Cash Budget:**
   - The company needs to maintain a minimum cash balance of $12,000.
   - Cash inflows include collections from sales.
   - Cash outflows include payments for purchases, selling and administrative expenses, and one-time expenses such as the $350,000 copyright infringement penalty in May.
   - Borrowing from East Rivers Bank will be required if the cash balance falls below $12,000.

### 6. **Income Statement (Contribution Approach):**
   - Calculate sales revenue, variable costs (including cost of goods sold and sales commissions), and fixed expenses.
   - The one-time penalty and depreciation should be included in the expenses.

### 7. **Budgeted Balance Sheet as of June 30, 2024:**
   - Adjust the assets (cash, accounts receivable, inventory) and liabilities (accounts payable, loans) based on the quarterly transactions.

Would you like help creating specific schedules or calculations for these items? 

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### Related Questions:
1. How do you calculate the ending inventory based on future sales projections?
2. What methods are commonly used to manage cash flow shortages in budgeting?
3. How is simple interest on loans calculated for cash budget purposes?
4. Why is a master budget important in managerial decision-making?
5. What are the benefits of using the contribution approach for preparing income statements?

**Tip:** In master budgeting, always align inventory and cash flows to sales cycles to prevent cash shortages.

Based on the case study you uploaded, the task is to create a master budget for the SPD division of Allteq Solutions for the quarter ending June 30, 2024. The required budgets and financial statements involve sales forecasts, cash collections, merchandise purchases, and other financial projections.

Learn how to create a master budget for the SPD division of Allteq Solutions, covering sales forecasts, merchandise purchases, cash collections, and financial statements for the quarter ending June 30, 2024. Includes calculations for sales, inventory, and loan interest.

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