Master Budget Addams Company, a merchandising firm that sells one product, estimates it will sell 12,000 units of its product at $60 per unit in...

Master Budget

Addams Company, a merchandising firm that sells one product, estimates it will sell 12,000 units of its product at $60 per unit in December.

In November, the company prepared other information to prepare a budget for December, as shown here:

Merchandise inventory, December 1: 2,000 units 

Desired merchandise inventory for December 31: 3,000 units 

Cost per unit of merchandise purchases: $40 

Selling and administrative expenses: $200,000 

Cash balance, December 1: $30,000 

November sales: $600,000 

• The company estimates that 60% of each month's sales are collected in the month of sale and that the remaining 40% is collected in the month after sale. 
• The $200,000 of selling and administrative expenses includes $40,000 of depreciation. 
• The company pays for half of the merchandise purchases during the month of purchase and pays the remainder during the month following purchase. Estimated merchandise purchases for November are $340,000. 
• All other out-of-pocket expenses are paid for in cash. 

Please answer the following:

1. How many units of merchandise will Addams budget to purchase in December? What is the dollar amount of Addams' budgeted merchandise purchases for December?
2. Prepare a budgeted income statement for the month ended December for Addams Company. 
3. Prepare a statement of estimated cash flows for the month ended December for Addams Company.