o 40% of sales made each month are cash sales. The rest of sales are made on account (Accounts Receivable). Total sales are expected to increase each month by 17%. o Cash from cash sales is collected immediately in the month of the sale). All cash from sales made on account is collected in the month following the sale. o Desire predicts that total sales in January of Year 2 will be $246,000 Desire anticipates Cost of Goods Sold for each month to be 72% of total sales for that month. O Desire requires that ending inventory for each month be 20% of the next month's expected cost of goods sold. o Because Desire is set to begin operations on October 1", they did not have any beginning inventory at the beginning of October. o Desire makes all their inventory purchases on account. They will pay for 35% of inventory purchases in the month of purchase, and they will pay for the rest (65%) in the month following the purchase Selling and Administrative Expenses are as follows: Total salaries expense is $25,000 each month, and Desire pays this expense in the month it is incurred Desire has a sales commission expense equal to 3% of total sales for the month. They do not pay their salespeople the commission until the month following when the sales are made o Supplies expense is 2% of total sales for the month and is paid for in the month of the sale. Utilities expense is expected to be $2,250 each month. Utilities are not paid until the month after the expense is incurred. o 40% of sales made each month are cash sales. The rest of sales are made on account (Accounts Receivable). Total sales are expected to increase each month by 17%. o Cash from cash sales is collected immediately in the month of the sale). All cash from sales made on account is collected in the month following the sale. o Desire predicts that total sales in January of Year 2 will be $246,000 Desire anticipates Cost of Goods Sold for each month to be 72% of total sales for that month. O Desire requires that ending inventory for each month be 20% of the next month's expected cost of goods sold. o Because Desire is set to begin operations on October 1", they did not have any beginning inventory at the beginning of October. o Desire makes all their inventory purchases on account. They will pay for 35% of inventory purchases in the month of purchase, and they will pay for the rest (65%) in the month following the purchase Selling and Administrative Expenses are as follows: Total salaries expense is $25,000 each month, and Desire pays this expense in the month it is incurred Desire has a sales commission expense equal to 3% of total sales for the month. They do not pay their salespeople the commission until the month following when the sales are made o Supplies expense is 2% of total sales for the month and is paid for in the month of the sale. Utilities expense is expected to be $2,250 each month. Utilities are not paid until the month after the expense is incurred