e. Budgeted monthly selling and administrative expenses are: Salary Expense (Fixed) $35,000 Sales Commissions 6% of Sales Supplies Expense $4000 Utilities (Fixed) $ 2,400 Depreciation on Center Equipment (Fixed)* $ 1,750 Rent (Fixed) $ 5,000 Miscellaneous 2% of Sales

*The capital expenditures budget shows that Elliott must purchase $220,000 of equipment in October 2022 to establish the new center. The equipment supplier allows a thirty-day trial period. Dryden will pay for the equipment on October 31. The equipment is expected to have a 7-year useful life and a $10,000 salvage value.

Prepare a selling and administrative expense budget.

f. Sales commissions are paid in the month after the month in which they are incurred. Miscellaneous expenses are also 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 and administrative expenses.

g. Using a line of credit, Dryden borrows and repays principal in increments of $1,000 on the last day of the month as needed. It pays interest of .75 percent per month in cash on the last day of the month. Company policy is to maintain an ending cash balance of at least $20,000. Use this information and the schedules produced above to prepare a cash budget.