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Mecca 3 Company, a retailer of specialty wall-papers, prepares a monthly master budget. Data for the September master budget are given below:

a. The August 31st balance sheet (Actual):
	cash	$32,000	accounts payable	$133144
	accounts receivable	138,000
	inventory	52,650	capital stock	270,000
	building and equipment (net)	209,500	retained earnings	29,006

b.	Actual sales for August and budgeted sales for September, October, and November are given below:
	August-Actual	$230,000
	September-Projected	390,000
	October-Projected	405,000
	November-Projected	320,000

c.	Sales are 40% for cash and 60% on credit. All credit sales are collected in the month following the sale. There are no bad debts.
d.	The gross margin percentage is 55% of sales. The desired ending inventory is equal to 30% of the following months COGS. One fourth of the purchases are paid for in the month of the purchase and the remaining 75% are purchased on account and paid in full the following month.
e.	The monthly operating expenses are $132,000 including the monthly depreciation of $14,000
f.	In September, Mecca Company will purchase new office equipment for $48,000 cash. The expected useful life of the new equipment is 6 years, with no salvage value. It will be depreciated using the straight-line method. Mecca will start depreciating the equipment in September (full month).
g.	Dividends of $24,500 and $26,000 will be declared and paid in September and October, respectively.
h.	The company must maintain a minimum cash balance of $30,000. A line of credit is used to maintain this balance. Borrowing will be made in increments of $1,000. All borrowing is done at the beginning of the month and repayments are made at the end of the month. The annual interest rate is 12%, paid when the loan is repaid ( ignore the accrual of interest).

Required:

1. Prepare a balance sheet, income statement, and cash budget for the month of September.

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