Educational Supply Company case study. The company provides educational materials and supplies to educational institutions. The business model is to be a one-stop provider of educational supply needs. For example, some of their product lines include educational workbooks, classroom visual aids, instructor support materials, art supplies, lab supplies, and administrative office supplies. While the company serves all levels of educational institutions, the majority of its customers are K-12 schools. Sales can vary quite a bit from month-to-month, as K-12 educational institutions have seasonal ordering patterns. Thus, budgeting is vital for planning and cash-flow purposes. educational supply has a June 30 fiscal year end.

create department budgets for the four main departments of Educational Supply Company: Sales, Purchasing Operation, and Finance.

Assume you are the new cost accountant at company. In this new position, you have been asked to perform a few tasks for the company's leadership team. The company has four main managers: sales manager, purchasing manager, operations manager, and finance manager. Each manager has general information about the company as a whole, as well as information about their own departmentprivate information known only by this departmental managerthat is more accurate than the general corporate information.

complete the four department budgets for the three-month period beginning July 1 and ending September 30.

Address the critical elements listed below:

.Budgeting:

Prepare Budgets A. Review the financial information and enter data into the correct tabs in the Final Project II workbook. Be sure to complete all the relevant tabs in the workbook. Complete the following:

1.A sales budget by month and in total

2.A schedule of expected cash collections from sales by month and in total

3.A merchandise purchase budget in dollars by month and in total

4. A schedule of expected cash disbursements for merchandise purchases by month and in total

5. A selling and administrative budget by month and in total

6. A schedule of expected cash disbursements for selling and administration by month and in total

7. A cash budget by month and in total

DATA

SALES MANAGER PRIVATE INFORMATION July August September October Most likely sales $600,000 $910,000 $475,000 $385,000 PURCHASING MANAGER PRIVATE INFORMATION Part 1 Information Most likely cost of merchandise as a % of sales 45% Desired ending inventory as a percentage of next month's cost of sales 20% OPERATION MANAGER PRIVATE INFORMATION Part 1 Information Most likely shipping expenses as a percent of sales 5.0% Most likely other expenses as a percent of sales 8.0% Salaries and wages (per month) $85,000 Most likely advertising costs (per month) $50,000 Most likely insurance costs (per month) $3,000 Depreciation expense (per month) $25,000 FINANCE MANAGER PRIVATE INFORMATION Part 1 Information Percent sales collected in month of sale 30% Percent sales collected in month after sale 70% Percent of inventory purchases paid in month of purchase 50% Percent of inventory purchases paid in month after purchase 50% Percent of operating expenses paid in month of purchase 100% Percent of operating expenses paid in month after purchase 0% Desired minimum ending cash balance each month $35,000 Borrow in increments of $1,000 Monthly interest rate on borrowings (not compounded) 1% Other planned outlays of cash July August September Capital expenditures $200,000 $90,000 $- Dividends $50,000 $- $- SRS Educational Supply Company Balance Sheet Previous Year End Assets Current assets: Cash $40,000 Accounts receivable $340,000 Inventory $50,000 Prepaid insurance $18,000 Total current assets $448,000 Buildings and equipment (net) $860,000 TOTAL ASSETS $1,308,000 Liabilities and Equity Liabilites Accounts payable $130,000 Notes payable $- Total liabilities $130,000 Stockholder's equity Capital stock $420,000 Retained earnings $758,000 Total equity $1,178,000 TOTAL LIABILITIES AND EQUITY $1,308,000