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Techlabs operates a computer training center. The following data relate to the preperation of a master budget for January 2021.

1. At the end of 2020, the company's general ledger indicated the following balance:

Debits Credits

Cash. 60,000 Accounts Payable: 40,000

Accounts Recievable: 40,000 Note Payable: 60,000

Equipment (net): 120,000 Common Stock: 30,000

Retained Earnings: 90,000

Total: 220,000 Total: 220,000

2. Tuition revenue in december 2020 was 80,000, and tuition revenue budgeted for january 2021 is 110,000

3. Fifty Percent of tuition revenue is collected in the month earned, and 50 percent is collected in subsequent month. The receivable balance at the end of 2020 reflects tuition earned in december 2020

4. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, 60,000; rent, 4,000; depreciation on equipment, 8,000; utilities, 2,000; other, 800.

5. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The 40,000 payable at the end of 2020 represents money owed for the purchase of computer equipment in december 2020.

6. THe company intends to purchase 50,000 of computer equipment in january 2021. the anticipated 8,000 per month of depreciation (see number 4) reflects the addition of 2,000 of monthly depreciation related to this purchase.

7. The note is at 15 percent per annum and requires monthly interest payments of 750. The payments are made on the 20th of each month. The principal must be paid in february 2022.

8. The tax rate is 20 percent.

Required

Complete the following budgets

a. Techlabs Cash Budget For January 2021

Cash reciepts

Collection of December 2020 tuition _______

Collection of January 2021 Tuition _________

Total Cash Receipts ___________

Cash Disbursements

Payment of salaries

payment of rent

payment of utilities

payment of other expenses

Payment for purchases of computer equipment

Payment of interest on note

Payment of taxes

Total Disbursements

Excess disbursements over receipts

Plus beginning cash balance

Ending cash balance

B. Techlabs Budget Income Statement for January 2021

Tuition revenue

Less:

Salaries

ent

Utilities

Depreciation

Other

Interest Expenses

Total Expense

Income Before taxes

Taxes on Income

Net income

C. Techlabs Budgeted Balance Sheet as of January 31, 2021

Assets

Cash

Accounts receivable

Equipment

Total Assets

Liabilities

Accounts Payable

Note payable

Total Liabilities

Stockholders equity

common stock

retained earnings

total stockholders equity

total liabilities and stockholders equity

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