Budgeted monthly selling and administrative expenses per month are:
Salary expense (fixed)	$ 9,000
Sales commissions	5% of sales
Supplies expense	2% of sales
Utilities (fixed)	$ 700
Depreciation on center equipment (fixed)*	$ 2,000
Rent (fixed)	$ 2,400
Miscellaneous (fixed)	$ 600
*The capital expenditures budget shows that the company will spend $82,000 on October 1 for store fixtures, which are expected to have a 3-year useful life and a $10,000 salvage value. Prepare a selling and administrative expenses budget.
Sales commissions and utilities are paid in the month after the month in which they are incurred. All other expenses are paid in the month they are incurred. Prepare a schedule of cash payments for selling & administrative expenses.
Selling and Administrative (S&A) Expense Budget
	October	November	December	Pro Forma
				Stmt. Data
Salary Expense
Sales Commissions 5% Sales					(a)
Supplies Expense 2% Sales
Utilities					(b)
Depreciation on Equipment					(c)
Rent
Miscellaneous
S&A Expenses before Interest					(d)
(Interest expense is computed in the cash budget; see requirement j)
Schedule of Cash Payments for S&A Expenses
Salary Expense
100% Prior Months Sales Commissions
Supplies Expense
100% Prior Months Utilities
Rent
Miscellaneous
Total Payments for S&A Expenses
Total Budgeted Sales (from Sales budget)	-	-	-
(a) Sales commissions payable balance on December 31 pro forma balance sheet.
(b) Utilities payable balance on December 31 pro forma balance sheet.
(c) Accumulated depreciation balance on December 31 pro forma balance sheet (sum of monthly amounts).
(d) S&A expense on first quarter pro forma income statement (sum of monthly amounts).

Problem 14-22 Preparing budgets with multiple products Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is working with the com pany's accountant to prepare next year's budget. Ms. Jasper estimates that sales will increase 5 percent for peaches and 10 percent for oranges. The current year's sales revenue data follow. LO 14-2, 14-3, 14-4, 14-6 CHECK FIGURES c1st OTR purchases for peaches: $51.560 2nd OTR purchases for oranges $152.460 Third Quarter Fourth Quarter Total Peaches Oranges Total First Quarter $ 80,000 200.000 $280.000 Second Quarter $100,000 225.000 $325,000 $160,000 285.000 $445.000 $140.000 190,000 $330.000 $ 480.000 900.000 $1,380.000 Based on the company's past experience, cost of goods sold is usually 60 percent of sales reve- nue. Company policy is to keep 10 percent of the next period's estimated cost of goods sold as the current period's ending inventory. (Hint: Use the cost of goods sold for the first quarter to determine the beginning inventory for the first quarter.) Required a. Prepare the company's sales budget for the next year for each quarter by individual product. b. If the selling and administrative expenses are estimated to be $350,000, prepare the company's budgeted annual income statement c. Ms. Jasper estimates next year's ending inventory will be $10,000 for peaches and $20,000 for oranges. Prepare the company's inventory purchases budgets for the next year, showing quarterly figures by product LO 14-2, 14-3, 14-4, 14-5, 14-6 CHECK FIGURES Dec. purchases: $84.732 Now, surplus before financing activities: $30.486 Problem 14-23 Preparing a master budget for retail company with no beginning account balances Camden Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget co- ordinator, you have been assigned the following tasks. Required Round all computations to the nearest whole dollar a. October sales are estimated to be S125.000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 8 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 S6,000. 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. 534 Chapter 14 e. Budgeted selling and administrative expenses per month follow. Salary expense (foed) $9,000 Sales commissions 5% of Sales Supplies expense 2% of Sales Utilities (foxed) $700 Depreciation on store fixtures (fored)" $2,000 Rent (fixed) $2,400 Miscellaneous (fixed) $600 "The capital expenditures budget indicates that Camden will spend $82,000 on October 1 for store fictures, which are expected to have a $10,000 salvage value and a three year (36 month useful life. Use this information to prepare a selling and administrative expenses budget. r. 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 ad- ministrative expenses. . 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. 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. Problem 14-22 Preparing budgets with multiple products Jasper Fruits Corporation wholesales peaches and oranges. Barbara Jasper is working with the com pany's accountant to prepare next year's budget. Ms. Jasper estimates that sales will increase 5 percent for peaches and 10 percent for oranges. The current year's sales revenue data follow. LO 14-2, 14-3, 14-4, 14-6 CHECK FIGURES c1st OTR purchases for peaches: $51.560 2nd OTR purchases for oranges $152.460 Third Quarter Fourth Quarter Total Peaches Oranges Total First Quarter $ 80,000 200.000 $280.000 Second Quarter $100,000 225.000 $325,000 $160,000 285.000 $445.000 $140.000 190,000 $330.000 $ 480.000 900.000 $1,380.000 Based on the company's past experience, cost of goods sold is usually 60 percent of sales reve- nue. Company policy is to keep 10 percent of the next period's estimated cost of goods sold as the current period's ending inventory. (Hint: Use the cost of goods sold for the first quarter to determine the beginning inventory for the first quarter.) Required a. Prepare the company's sales budget for the next year for each quarter by individual product. b. If the selling and administrative expenses are estimated to be $350,000, prepare the company's budgeted annual income statement c. Ms. Jasper estimates next year's ending inventory will be $10,000 for peaches and $20,000 for oranges. Prepare the company's inventory purchases budgets for the next year, showing quarterly figures by product LO 14-2, 14-3, 14-4, 14-5, 14-6 CHECK FIGURES Dec. purchases: $84.732 Now, surplus before financing activities: $30.486 Problem 14-23 Preparing a master budget for retail company with no beginning account balances Camden Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget co- ordinator, you have been assigned the following tasks. Required Round all computations to the nearest whole dollar a. October sales are estimated to be S125.000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 8 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 S6,000. 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. 534 Chapter 14 e. Budgeted selling and administrative expenses per month follow. Salary expense (foed) $9,000 Sales commissions 5% of Sales Supplies expense 2% of Sales Utilities (foxed) $700 Depreciation on store fixtures (fored)" $2,000 Rent (fixed) $2,400 Miscellaneous (fixed) $600 "The capital expenditures budget indicates that Camden will spend $82,000 on October 1 for store fictures, which are expected to have a $10,000 salvage value and a three year (36 month useful life. Use this information to prepare a selling and administrative expenses budget. r. 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 ad- ministrative expenses. . 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. 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