Stillwater Video Company Inc. produces and markets two pop

Stillwater Video Company Inc. produces and markets two popular video games High Range and Star Boundary. The closing account balances on the companys balance sheet for last year are as follows: Cash $18735; Accounts Receivable $19900; Materials Inventory $18510; Work in Process Inventory $24680; Finished Goods Inventory $21940; Prepaid Expenses $3420; Plant and Equipment $262800; Accumulated Depreciation-Plant and Equipment $55845; Other Assets $9480; Accounts Payable $52640; Mortgage Payable $70000; Common Stock $90000; and Retained Earnings $110980.Operating budgets for the first quarter of the coming year show the following estimated costs: direct materials purchases $58100; direct materials usage $62400; direct labor expense $42880; overhead $51910; Selling expenses $35820; general and administrative expenses $60240; cost of goods manufactured $163990; and cost of goods sold $165440. Estimated ending cash balances are as follows: January $34610; February $60190; and March $54820. The company will have no capital expenditures during the quarter.Sales are projected to be $125200 in January $105 100 in February and $112600 in March. Accounts receivable are expected to double during the quarter and accounts payable are expected to decrease by 20 percent. Mortgage payments for the quarter will total $6000 of which $20000 and other assets are projected to increase by 50 percent over the budget period. Depreciation for plant and equipment (already included in the overhead budget) averages 5 percent of total plant and equipment per year. Federal income taxes (34 percent of profits) are payable in April. The company pays no dividends.Required1. Prepare a budgeted income statement for the quarter ended March 31.2. Prepare a budgeted balance sheet as of March 31.

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