Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. [The following information applies to the questions displayed below.) 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. Required 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)* Rent (fixed) Miscellaneous (fixed) $19,000 5% of Sales 2% of Sales $ 2,400 $ 5,000 $ 5,800 $ 2,200 *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. Required information Answer is complete and correct. Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Required E Required F Required G 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. October November December Sales Budget Cash sales Sales on account IS 99,000 $ 118,800 $ 142,560 121.000 145,200 174.240 220.000 $ 264,000 $ 316,800 Total budgeted sales IS Return to qu 4. LIL WIIUTO FLUI, IL RILICITILIL VII,VVU, VUI uy LIICIIVIT LIILIVU UUT VI LIIL ILITU HIUYULUUL VERY Required information Answer is complete and correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Required G 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. October November December Is Schedule of Cash Receipts Current cash sales Plus collections from AIR Total collections 99,000 $ 0 99,000 Is 118.800 121.000 239,800 142.560 145,200 287,780 Is Return Required information Answer is complete and correct. . Complete this question by entering your answers in the tabs below. Required 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 $13,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. October November December IS s s Inventory Purchases Budget Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) 132,000 15,840 147,840 158,400 19,008 177,408 190,080 13,000 203,080 (19,008) 184,072 0 (15,840) 161,568 147,840 $ s Return to que ALTII VAllare Terrier AIS TAVSIIS VPS TIP IASI LAVDIINPUT TAS IRPPGII er mer enn Required information Answer is complete and correct. Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Required E Required F Required G 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. (Round your final answers to the nearest whole dollar amounts.) November December October Schedule of Cash Payments Budget for Inventory Purchases Payment of current month's accounts payable 118.272 Payment for prior month's accounts payable Total budgeted payment for inventory 118,272 129,254s 29,568 158,822 147,258 32.314 179,572 Ret Required information Answer is complete and correct. Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Required E Required F Required G Prepare a selling and administrative expenses budget. November December IS 19.000 IS October Selling and Administrative Expense Budget Salary expense $ 19.000 Sales commissions 11,000 Supplies expense 4,400 Utilities 2,400 Depreciation on store fixtures 5,000 Rent 5.800 Miscellaneous 2.200 Total S&A expenses IS 49,800 13,200 5,280 2,400 5.000 5,800 2.200 52.880 19,000 15,840 6,336 2,400 5.000 5,800 2.200 56,576 IS IS $ Retu Required information Answer is complete and correct. Complete this question by entering your answers in the tabs below. Required A Required B Required c Required D Required E Required F 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. November December October Schedule of Cash Payments for S&A Expenses Salary expense $ 19,000 Sales commissions 0 IS IS 19,000 11,000 19,000 13,200 Supplies expense Utilities 4,400 0 0 0 5,800 JOOOOOOO 5,280 2.400 O 0 OOOOOOO 6,336 2.400 0 0 OOOOOOO Depreciation on store fixtures Rent Miscellaneous Total payments for S&A expenses 2.200 31,400 5,800 2.200 45.880 5,800 2.200 48.936 $ $ IS G Retur Required information 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. (Any repayments/shortage which should be indicated with a minus sign.) Show less Cash Budget October November December IS $ 22.328 IS olol 0 99,000 99,000 239,800 262,128 22.000 287,780 309,760 Section 1: Cash Receipts Beginning cash balance Add: Cash receipts Total Cash available Section 2: Cash Payments For inventory purchases Purchase of store fixtures For selling and administrative expenses 179,572 0 OOOO 118.272 210,000 31,400 0 OOOO 158,822 0 0 45,680 2,830 48.936 2,502 Interest expense 359,672 207,332 231,010 Total budgeted disbursements Section 3: Financing Activities Surplus (shortage) Borrowing (repayment) 54,796 (260,672) 283,000 78.750 (56.751) (32.798) Ending cash balance IS 22.328 $ 22.000 IS 21.999 Required information (The following information applies to the questions displayed below. 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. 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 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 5,332 Net income $ 314,988 OOOOOO Docuired Required information ... 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.) PEREZ COMPANY Pro Forma Balance Sheet December 31, year 1 Assets Accounts receivable Cash $ 440.440 X 0 $ 440,440 Inventory Store fixtures Accumulated depreciation Book value of fixtures Total assets Liabilities Accounts payable Line of credit liability Sales commissions payable Utilities payable Equity Retained earnings Total liabilities and equity $ 0 Required information NIJELI I FIVE LIPIELLE Complete this question by entering your answers in the tabs below. Required 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.) PEREZ COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, year 1 Cash flows from operating activities Cash payments for selling and administrative expenses Cash payments for interest expense Cash payments for inventory Cash receipts from customers Net cash flows from operating activities Cash flows from investing activities Cash payment for store fixtures Cash flow from financing activities Net inflow from line of credit Net increase in cash Plus: Beginning cash balance Ending cash balance $ 0 $ 0