Exam corporation is in the business of providing tests for students. A template is attached for their budgeting process. Use the given information to complete the the required budgets and pro forma income statement. Exam's cash sales in September were $950,000 and credit sales were 190,000. Exam expects sales to increase by $50,000 each month during the budgeted period. Cost of Goods Sold is provided as 77% of the total sales for the month. SG&A is modeled to be 9% of total sales. Beginning inventory is $100,000. Exam begins the period with $171,000 in cash. Exam purchases inventory one month in advance of their sale. 5% of the current month's COGS are kept as a buffer. this amount as a buffer. For Credit Sales, 75% is collected in the month of the sale. The remainder is collected in the following month. Operating expenses are paid in the month incurred. Interest paid each month is based on their long-term debt of 50,000,000 at 1.5% interest. REQUIRED: 1) Prepare the Required Budgets for Exam. 2) Exam would like to have a cash buffer of $365,000 at the end of December. Will Exam have sufficient cash to maintain this buffer? Sales Budget Cash Sales Credit Sales Total Budgeted Sales Total Budgeted Collections Inventory Budget Cost of Goods Sold Target Ending Inventory Inventory Needed Beginning Inventory Total Budgeted Cash Outflow Other Expense Budget SG&A Expense Total Budgeted Cash Outflow Interest Payment Budget Interest Expense Total Budgeted Cash Outflow Cash Budget Cash Inflows: From Customers Cash Outflows: For Inventory For SG&A Expenses For Interest Expenses Beginning Cash Change in Cash Ending Cash September October October October October October Budget Month November November Budget Month November Budget Month November Budget Month November December December December December December