I have completed this to best of my ability but my ending cash balance for July 30th is 10,850 which is incorrect as the check figures section indicates it should be 10,550. I am not sure what I have done incorrectly. Helping me calculate the ending July Balance is primary goal. I think I can complete the remainder if I receive assistance with that part.

1. Prepare the sales budget (each month and total four months)
2. Prepare the purchases budget showing the inventory and cost of goods sold (all in one) (each month and total four months)
3. Prepare the operating expense budget for the income statement (each month and total four months)
4. Prepare the budgeted cash collections from customers (each month and total four months)
5. Prepare the budgeted cash disbursements for purchases and operating expenses (each month and total four months)
6. Prepare the cash budget (each month and total four months)
7. Prepare the budgeted income statement (each month and total four months)
8. Prepare the budgeted balance sheet at October 31, 2020

Sales in July 50,000 August 80,000 September 60,000 October 50,000

Sales are 60% cash and 40% on credit. ASI collects all credit sales the month after the sale. The $16,000 of accounts receivable at June 30 are from credit sales in June. Uncollectible accounts are insignificant.

1. ASI maintains inventory equal to $20,000 plus 80% of the budgeted cost of goods sold for the following month. November 2020 projected cost of goods sold is $28,000. Cost of goods sold averages 70% of sales. These percentages are based on experience.

ASI pays for inventory as follows: 50% during the month of purchase and 50% during the next month. Accounts payable consists of inventory purchases only.

2. Monthly payroll has two parts: a salary of $2,500 plus sales commissions equal to 15% of the months sales. The company pays half this amount during the month and half early in the following month.

3. Other monthly expenses are as follows:

Rent expense $2,000, paid as incurred

Depreciation expense, including new truck 500

Insurance expense 200 expiration of prepaid amount

Miscellaneous expenses 5% of sales, paid as incurred

4. ASI plans to purchase a used delivery truck in July for $3,000 cash.

5. Corporate requires each store to maintain a minimum cash balance of $10,000 at the end of each month. The store can borrow money on 6-month notes payable of $1,000 each at an annual interest rate of 12%. Management borrows enough to maintain the $10,000 minimum, but not a great deal more. Notes payable require six equal monthly payments of principal, plus monthly interest on the entire unpaid principal. Borrowing and all principal and interest payments occur at the end of the month.

6. Income taxes are the responsibility of corporate headquarters, so you can ignore taxes for budgeting purposes.

Check figures: Inventory purchases for all four months = $162,400; ending cash balance for July 2020 = $10,550; Total assets = $106,125; net income for all four months = $2,975.

Balance Sheet as of June 30 below

Assets

Liabilities

Current assets:

Current liabilities:

Cash

15,000

$

Accounts payable

16,800

$

Accounts receivable

16,000

Salary & commissions payable

4,250

Inventory

48,000

Total liabilities

21,050

Prepaid insurance

1,800

Total current assets

80,800

Long- term assets:

Owners' Equity

78,950

Equipment & fixtures

32,000

Accumulated depreciation

(12,800)

Total building equipment

19,200

Total assets

100,000

$

Total liabilities & owners' equity

100,000

$

American Sports, Inc. Store No. 5

Balance Sheet

June 30, 2020