Master Budget Project ASSIGNMENT for Chapter 14 Valley Distributors, a wholesale company, is considering whether to open a new distribution center. The center would open January 1,2017. To make the decision, the planning committee requires a master budget for the center's first quarter of operation (January, February, and March of 2017). Required You are to construct the first quarter master budget based on the following expectations: a January sales units are estimated to be 37,000 and the selling price is $25.00 per unit. The company collects 25% of the sales in cash and the remaining are 75% are credit sales. The company expects numberofunits to grow 3% per month. Prepare a sales budget. b. T he company expects to collect 100% of accounts receivable in the month following the sale. Prepare a schedule of expected cash receipts Cost of goods sold will be 58% of sales. Company policy is to budget an ending inventory balance equal to 30% of the next month's projected cost of goods sold. Assume Valley expects April cost of goods sold to be $585,000. Valley had no inventory as of January I, 2017. Prepare an inventory purchases budget c. All inventory purchases are on account and not paid in cash at time of purchase. The company pays 70% of accounts payable in the month of purchase. It pays the remaining 30% in the following month. Prepare a schedule of expected cash payments for inventory purchases. d. Budgeted monthly selling and administrative expenses are: e. Salary Expense (Fixed) Sales Commissions $25,000 5% of Sales $7,500 1% of Sales Supplies Expense (Fixed Utilities (Fixed) Depreciation on Center Equipment (Fixed) see below Rent (Fixed) Miscellaneous $11,250 $5,000 The capital expenditures budget shows that Valley must purchase $50,000 of equipment on January 1 to establish the new center. Valley will pay for the equipment on January 31. The equipment is expected to have a 7-year useful life and a $3,800 salvage value and will depreciate on a straight-line basis. Make sure to calculate depreciation ON A MONTHLY BASIS. Prepare a selling and administrative expense budget Sales commissions and utilities expense are paid in the month after the month in which they are incurred. All other expenses are paid in the month in which they are incurred. Preparea schedule of cash payments for selling and administrative expenses f. Master Budget Project ASSIGNMENT for Chapter 14 Valley Distributors, a wholesale company, is considering whether to open a new distribution center. The center would open January 1,2017. To make the decision, the planning committee requires a master budget for the center's first quarter of operation (January, February, and March of 2017). Required You are to construct the first quarter master budget based on the following expectations: a January sales units are estimated to be 37,000 and the selling price is $25.00 per unit. The company collects 25% of the sales in cash and the remaining are 75% are credit sales. The company expects numberofunits to grow 3% per month. Prepare a sales budget. b. T he company expects to collect 100% of accounts receivable in the month following the sale. Prepare a schedule of expected cash receipts Cost of goods sold will be 58% of sales. Company policy is to budget an ending inventory balance equal to 30% of the next month's projected cost of goods sold. Assume Valley expects April cost of goods sold to be $585,000. Valley had no inventory as of January I, 2017. Prepare an inventory purchases budget c. All inventory purchases are on account and not paid in cash at time of purchase. The company pays 70% of accounts payable in the month of purchase. It pays the remaining 30% in the following month. Prepare a schedule of expected cash payments for inventory purchases. d. Budgeted monthly selling and administrative expenses are: e. Salary Expense (Fixed) Sales Commissions $25,000 5% of Sales $7,500 1% of Sales Supplies Expense (Fixed Utilities (Fixed) Depreciation on Center Equipment (Fixed) see below Rent (Fixed) Miscellaneous $11,250 $5,000 The capital expenditures budget shows that Valley must purchase $50,000 of equipment on January 1 to establish the new center. Valley will pay for the equipment on January 31. The equipment is expected to have a 7-year useful life and a $3,800 salvage value and will depreciate on a straight-line basis. Make sure to calculate depreciation ON A MONTHLY BASIS. Prepare a selling and administrative expense budget Sales commissions and utilities expense are paid in the month after the month in which they are incurred. All other expenses are paid in the month in which they are incurred. Preparea schedule of cash payments for selling and administrative expenses f