October sales are estimated to be $$230,000,$ of which $45$ percent will be cash and $55$ percent will be credit. The company expects sales to increase at the rate of $20$ percent per month. Prepare a sales budget.

The company expects to collect $100$ percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.

The cost of goods sold is $60$ percent of sales. The company desires to maintain a minimum ending inventory equal to $10$ percent of the next month$$s cost of goods sold. However, ending inventory of December is expected to be $$12,400.$ Assume that all purchases are made on account. Prepare an inventory purchases budget.

The company pays $80$ percent of accounts payable in the month of purchase and the remaining $20$ percent in the following month. Prepare a cash payments budget for inventory purchases.

Budgeted selling and administrative expenses per month follow:

Salary expense $($fixed$)$ $ $18,400$

Sales commissions $5\%$ of Sales

Supplies expense $2\%$ of Sales

Utilities $($fixed$)$ $ $1,800$

Depreciation on store fixtures $($fixed$)*$ $ $4,400$

Rent $($fixed$)$ $ $5,200$

Miscellaneous $($fixed$)$ $ $1,600$

$*$The capital expenditures budget indicates that Fanning will spend $$182,400$ on October $1$ for store fixtures, which are expected to have a $$24,000$ salvage value and a three$-$year $(36-$month$)$ useful life.

Use this information to prepare a selling and administrative expenses budget.

Utilities and sales commissions are paid the month after they are incurred; all other expenses are paid in the month in which they are incurred. Prepare a cash payments budget for selling and administrative expenses.

Fanning borrows funds, in increments of $$1,000,$ and repays them on the last day of the month. Repayments may be made in any amount available. The company also pays its vendors on the last day of the month. It pays interest of $1$ percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $$16,000$ cash balance. Prepare a cash budget.