a) Sales budget October November December Cash Sales $ 126,000.00 $ 157,500.00 $ 196,875.00 Sales on Account $ 154,000.00 $ 192,500.00 $ 240,625.00 Total Budgeted Sales $ 280,000.00 $ 350,000.00 $ 437,500.00 b) Schedule of cash receipts October November December Current Cash sales $ 126,000.00 $ 157,500.00 $ 196,875.00 Add: Collection From A/R $ $ 154,000.00 $ 192,500.00 Total Collections $ 126,000.00 $ 311,500.00 $ 389,375.00 C) Inventory purchase budget October November December Budgeted Cost of goods sold $ 168,000.00 $ 210,000.00 $ 262,500.00 Add: Desired Ending Inventory $ 21,000.00 $ 26,250.00 $ 13,600.00 Inventory Needed $ 189,000.00 $ 236,250.00 $ 276,100.00 Less: Beginning Inventory $ 16,800.00 $ 21,000.00 $ 26,250.00 Required Purchases on account $ 172,200.00 $ 215,250.00 $ 249,850.00 d. Schedule of Cash payments budget for Inventory Purchases October November December Payment of Current Month's of accounts payable $ 137,760.00 $ 172,200.00 $ 199,880.00 Payment of Prior Month's of accounts payable $ 34,440.00 $ 43,050.00 Total Budgeted payment of Inventory $ 137,760.00 $ 206,640.00 $ 242,930.00 e. Selling & Administrative Exp budget October November December Salary (fixed) $ 19,600.00 $ 19,600.00 $ 19,600.00 Sales commissions (5% of sales) $ 14,000.00 $ 17,500.00 Supplies expense (2% of sales) $ 5,600.00 $ 7,000.00 $ 8,750.00 Utilities (fixed) $ 3,000.00 $ 3,000.00 $ 3,000.00 Depreciation $ 5,600.00 $ 5,600.00 $ 5,600.00 Rent (fixed) $ 6,400.00 $ 6,400.00 $ 6,400.00 Miscellaneous (fixed) $ 2,800.00 $ 2,800.00 $ 2,800.00 Total $ 43,000.00 $ 58,400.00 $ 63,650.00 Required a. October sales are estimated to be $280,000, of which 45 percent will be cash and 55 percent will be credit. The company expects sales to increase at the rate of 25 percent per month. Prepare a sales budget. 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 $13,600. Assume that all purchases are made on account. Prepare an inventory purchases budget. d. The company pays 80 percent of accounts payable in the month of purchase and the remaining 20 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) Sales commissions pplies expense Utilities (fixed) Depreciation on store fixtures (fixed) Rent (fixed) Miscellaneous (fixed) $19,600 5% of Sales 2% of Sales $ 3,000 $ 5,600 $ 6,400 $ 2,800 * *The capital expenditures budget indicates that Vernon will spend $237,600 on October 1 for store fixtures, which are expected to have a $36,000 salvage value and a three-year (36-month) useful life. Use this information to prepare a selling and administrative expenses budget. f. 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. g. Vernon 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 $28,000 cash cushion. Prepare a cash budget. Required information [The following information applies to the questions displayed below.] Vernon 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 first three months of operation. As budget coordinator, you have been assigned the following tasks. h. Prepare a pro forma income statement for the quarter. i. Prepare a pro forma balance sheet at the end of the quarter. j. Prepare a pro forma statement of cash flows for the quarter. Vernon 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 first three months of operation. As budget coordinator, you have been assigned the following tasks. h. Prepare a pro forma income statement for the quarter. i. Prepare a pro forma balance sheet at the end of the quarter. j. Prepare a pro forma statement of cash flows for the quarter. Complete this question by entering your answers in the tabs below. Required H Required I Required) Prepare a pro forma income statement for the quarter. VERNON COMPANY Pro Forma Income Statement For the Quarter Ended December 31, year 1 0 0 $ 0 Required H Required> Required H Required I Required) Prepare a pro forma balance sheet at the end of the quarter. (Amounts to be deducted should be indicated by a minus sign.) VERNON COMPANY Pro Forma Balance Sheet December 31, year 1 Assets 0 Total assets $ 0 Liabilities Equity Total liabilities and equity $ 0 Required information Required H Required I Required ] Prepare a pro forma statement of cash flows for the quarter. (Amounts to be deducted should be indicated by a minus sign.) VERNON COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, year 1 Cash flows from operating activities $ 0 Net cash flows from operating activities Cash flows from investing activities Cash flow from financing activities $ 0