Check my work 1 Required information (The following information applies to the questions displayed below.) Part 1 of 2 Perez 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. 20 points Required eBook References a. October sales are estimated to be $220,000, of which 45 percent will be cash and 55 percent will be credit. The company expects sales to increase at the rate of 20 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 $13,000. 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 Supplies expense Utilities (fixed) Depreciation on store fixtures (fixed)* $19,000 5% of Sales 2% of Sales $ 2,400 $ 5,000 n leommanvaxnerisconeri nemen Tie atos receivare cerealernvier Sales ir remont wine sale Required information Part 1 of 2 the next month's cost of goods sold. However, ending inventory of December is expected to be $13,000. 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. 20 points eBook Salary expense (fixed) Sales commissions Supplies expense Utilities (fixed) Depreciation on store fixtures (fixed)* Rent (fixed) Miscellaneous (fixed) $19,000 5% of Sales 2% of Sales $ 2,400 $ 5,000 $ 5,800 $ 2,200 References *The capital expenditures budget indicates that Perez will spend $210,000 on October 1 for store fixtures, which are expected to have a $30,000 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. Perez 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 $22,000 cash cushion. Prepare a cash budget. 2 Required information [The following information applies to the questions displayed below. Part 2 of 2 Perez 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. 20 points 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. Answer is not complete. Complete this question by entering your answers in the tabs below. 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.) Pronare a nrn torma ctatement of cach townc tor the carter 2 Required information Answer is not complete. Part 2 of 2 Complete this question by entering your answers in the tabs below. 20 points Required H Required I Required) Prepare a pro forma income statement for the quarter. PEREZ COMPANY Pro Forma Income Statement For the Quarter Ended December 31, year 1 Sales revenue 800, 800 Cost of goods sold (480,480) Gross margin 320,320 Selling and administrative expenses Operating income 320,320 Interest expense 141,826 Net income $ 178,494 OOOOOO Assets Part 2 of 2 Cash $ 44,774 Accounts receivable 174,240 20 points Inventory Store fixtures Accumulated depreciation $ 195,000 X 195,000 X 390,000 609,014 Total assets $ $ Liabilities Accounts payable Utilities payable Sales commissions payable 38,776 166,000 X 15,840 2,400 X 191,494 Equity Retained earnings 191,494 X 191,494 X 797,498 Total liabilities and equity $ MA Required H Required I Required ] Part 2 of 2 Prepare a pro forma statement of cash flows for the quarter. (Amounts to be deducted should be indicated by a minus sign.) 20 points PEREZ COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, year 1 Cash flows from operating activities Cash receipts from customers $ Cash payments for inventory Cash payments for selling and administrative expenses Cash payments for interest expense Net cash flows from operating activities Cash flows from investing activities 626,560 (451,513) X (102,016) (6,570) X $ 66,461 (210,000) Cash flow from financing activities Net inflow from line of credit 166,000 X Net increase in cash 0 X 22,461 x Plus: Beginning cash balance Ending cash balance 22.461