1relates to the expenses incurred in June Prepare a schedul e of cash payments f

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1relates to the expenses incurred in June Prepare a schedul e of cash payments for operations for July, August, and Septembe EX 6-22 Capital expenditures budget n January 1, 2012, the controller of Med-Tek Inc. is planning cap the years 2012-2015. The following interviews helped the controller collect the necessa information for the capital expenditures budg Director of Facilities: A const at ruction contract was signed in late 2011 for the construction of a new factory building a contract cost of $9,000,000. Th e construction is scheduled to begin in 2012 and be completed in 2013 Vice President of Manufacturing: Once the new factory building equipment in late 2013.l expect that an additional $150,000 will be needed early in the following year and install the equipment another $900,000 in equipment in 2015 is finished, we plan to purchase $1.2 million in before we can begin production. If sales continue to grow, I expect we'll need to invest Vice President of Marketing: We have really been growing lately. I wouldn't be surprised if we need to expand the size of our new factory building in 2015 by at least 40%. Fortunately, we expect inflation to have minimal impact on con struction costs over the next four years. Additionally, I would expect the cost of the expansion to be proportional to the size of the expansion Director of Information Systems: We need to upgrade our information systems to wireless network technology.It doesn't make sense to do this until after the new factory building is completed and producing product. During 2014, once the factory is up and running, we should equip the whole facility with wireless technology. I think it would cost us $1,200,000 today to install the technology. However, prices have been dropping by 25% per year, so it should be less expensive at a later date President: I am excited about our long-term prospects. My only short-term concern is financing the $5,500,000 of construction costs on the portion of the new factory building schedule d to be completed in 2012. Use the interview information above Med-Tek Inc. for the years 2012-2015 to prepare a capital expenditures budget for Series A

Explanation / Answer

Med - Tek Inc. Capital Expenditure Budget 2012 2013 2014 2015 Construction of new factory building 5500000 3500000 Purchase of new equipment 1200000 900000 Testing and instatallation of the equipment 150000 Expansion of the factory building 3600000 New wireless technology 975000 Total budgeted capital expenditure 5500000 4700000 1125000 4500000

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