4 Camden Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, year 1. The company president formed a planning committee to prepare a master budget for the rst three months of operation. As budget coordinator, you have been assigned the following tasks. Part1of2 problem 7-23A (Static) Part 1 20 points Required a. October sales are estimated to be $125,000, of which 40 percent will be cash and 60 percent will be credit. The company E expects sales to increase at the rate of 8 percent per month. Prepare a sales budget. Refe'enr-ES b. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts. c. The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum ending inventory equal to 10 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $6,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. d. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Prepare a cash payments budget for inventory purchases. e. Budgeted selling and administrative expenses per month follow: Salary expense (fixed) $9,000 Sales commissions 59a of Sales Supplies expense 2% of Sales Utilities (fixed) $ 700 Depreciation on store fixtures (fixed)>iRequired A Required B Required C Required D Required E Required F Required G The cost of goods sold is 60 percent of sales. The company desires to maintain a minimum ending inventory equal to 10 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $6,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. October November December Inventory Purchases Budget Budgeted cost of goods sold $ 75,000 $ 81,000 $ 87,480 Plus: Desired ending inventory 8,100 8,748 6,000 Inventory needed 83, 100 89,748 93,480 Less: Beginning inventory 0 8,100 8,748 Required purchases (on account) $ 83, 100 $ 81,648 $ 84,732 The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Prepare a cash payments budget for inventory purchases. (Round your nal answers to the nearest whole dollar amounts) Schedule of Cash Payments Budget for Inventory Purchases Payment of current month 5 accounts payable $ 58,170 57 154 59,312 Payment for prior month's accounts payable 24.930 24,494 Total budgeted payments for inventory 58,170 $ 82,084 $ 83,806 ( Requiredc RequiredE > Required A Required B Required C Required D Required E Required F Required G Prepare a selling and administrative expenses budget. October November December Selling and Administrative Expense Budget Salary expense $ 9,000 $ 9,000 $ 9,000 Sales commissions 6,250 6,750 7,290 Supplies expense 2,500 2,700 2,916 Utilities 700 700 700 Depreciation on store fixtures 2,000 2,000 2,000 Rent 2,400 2,400 2,400 Miscellaneous 600 600 600 Total S&A expenses $ 23,450 $ 24, 150 $ 24,906 Required A Required 3 Required C Required D Required E Required F Required G Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a cash payments budget for selling and administrative expenses. Schedule of Cash Payments for SM Expenses Salary expense Sales commissions Supplies expense Utilities Depreciation on store xtures Miscellaneous $ 14,500 $ 21,650 $ 22,386 Total payments for S&A expenses Beginning cash balance Ending cash balance Financing activity For inventory purchases For selling and administrative expenses Interest expense Purchase of store fixtures Surplus (shortage) Camden borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $6,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign.) Show less A Total budgeted disbursements In- Section 3: Financing Activities