Grant's Pet Emporium is a large Canadian distributor of Feline Fussy Feast (FFF), an elite brand of gourmet cat food. The senior management team estimates that Grant's Pet Emporium will sell the following number of cases of FFF for the first 6 months of 2021:

Month Number of Cans

January 2021 81,858

February 2021 85,304

March 2021 92,655

April 2021 81,645

May 2021 96,882

June 2021 108,026

Grant's Pet Emporium sells each case of FFF for the following amount: $14

The company's cost of goods sold as a percentage of sales is as follows:56%

Assume that budgeted monthly inventory purchases are equal to budgeted cost of goods sold. Purchases of merchandise for resale are paid for in the month following the sale.

Senior management estimates that for each month, 20% of sales will be made in cash. The rest of the sales will be on account (credit). From past experience, management has learned that monthly sales on account are collected according to the following pattern, with any remaining amounts deemed to be uncollectible:

Month of sale ---- 28%

First month following sale ---- 41%

Second month following sale---- 29%

Variable selling and administrative expenses are the following percentage of sales revenue:11%

All variable selling and administrative expenses are paid for in the month of sale.

Budgeted fixed selling and administrative expenses for the next 12 months are as follows:

Type of Cost Amount

Advertising $ 1,432,723

Depreciation $ 853,523

Insurance $ 342,009

Property taxes $ 498,644

Wages and salaries $ 2,172,464

All fixed selling and administrative expenses are incurred evenly throughout the year. All fixed selling and administrative costs are paid in the month incurred, with the exception of insurance and property taxes. Insurance and property taxes are both paid quarterly in January, April, July, and October.

Grant's Pet Emporium collected accounts receivable in the following amounts, pertaining to sales that occurred in the 2020 year:

Month of Collection Amount

January 2021 $ 595,865

February 2021 $ 629,135

Grant's Pet Emporium paid the following amounts in January 2021, representing accounts payable arising from purchases made during the 2020 year:

Type of Cost Amount

Cost of goods sold $ 648,374

The company requires a minimum cash balance of $100,000 to start each month. The beginning cash balance in January 2021 is budgeted to be $110,000. Grant's Pet Emporium can borrow a maximum of $250,000 from the bank using a revolving line of credit. The annual interest rate for this borrowing is 8%. Loan payments are made in periods when cash is available, with interest paid only on the portion of any principal being repaid. Assume that any borrowings occur at the beginning of the month in which the funds are needed, with any repayments of principal and interest occurring at the end of the month in which they are made.

In March 2021, the company intends to purchase equipment for $300,000. The equipment purchase will be paid in the month of March.

Required:

1. I need to make a Sales Budget and Schedule of Expected Cash Collections for the period ofJanuary 2021 to March 2021.

2.I need to make a Selling and Administrative Expense Budget, including a schedule of cash disbursements for the period of January 2021 to March 2021.

3.Also I need to make a Cash Budget for the period of January 2021 to March 2021.