Overview: This assessment focuses on the SRS Educational Supply Company case study. The company provides educational materials and supplies to educational institutions. The SRS business model is to be a one-stop provider of educational supply needs. For example, some of their product lines include educational workbooks, classroom visual aids, instructor support materials, art supplies, lab supplies, and administrative office supplies. While SRS serves all levels of educational institutions, the majority of its customers are K12 schools. Sales can vary quite a bit from month-to-month, as K12 educational institutions have seasonal ordering patterns. Thus, budgeting is vital for planning and cash-flow purposes. SRS has a June 30 fiscal year end. For Milestone One of Final Project II, you will create department budgets for the four main departments of SRS Educational Supply Company: Sales, Purchasing Operation, and Finance. Prompt: Assume you are the new cost accountant at SRS. In this new position, you have been asked to perform a few tasks for the companys leadership team. The company has four main managers: sales manager, purchasing manager, operations manager, and finance manager. Each manager has general information about the company as a whole, as well as information about their own departmentprivate information known only by this departmental managerthat is more accurate than the general corporate information. First, review the information for Final Project II. Then, using the Final Project II workbook, complete the four department budgets for the three-month period beginning July 1 and ending September 30. Specifically, you must address the critical elements listed below: I. Budgeting: Prepare Budgets A. Review the financial information and enter data into the correct tabs in the Final Project II workbook. Be sure to complete all the relevant tabs in the workbook. Complete the following: i. A sales budget by month and in total ii. A schedule of expected cash collections from sales by month and in total iii. A merchandise purchase budget in dollars by month and in total iv. A schedule of expected cash disbursements for merchandise purchases by month and in total v. A selling and administrative budget by month and in total vi. A schedule of expected cash disbursements for selling and administration by month and in total vii. A cash budget by month and in total

INSTRUCTIONS FOR MILESTONE 1 (Due Week 5) IMPORTANT NOTES: Make sure to completely review the Milestone One Final Project | Rubric. Use the data from this milestone and begin work on your final presentation, which is due in Module Seven. ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs): GENERAL You are the accountant tasked with creating the master budget for SRS Educational Supply Company. You have made your budget assumptions (see the red tab labeled Part II Assumptions) and are ready to prepare the following: SALES BUDGET Prepare the sales budget by month and in total. Prepare a schedule of excepted cash collections from sales by month and in total. PURCHASING BUDGET Prepare a merchandise purchases budget by month and in total. Prepare a schedule of expected cash disbursements for merchandise purchases by month and in total. ADMIN BUDGET Prepare a selling and admin budget by month and in total. Add expected cash disbursements for selling and admin by month and in total. CASH BUDGET Prepare a cash budget by month and total. FINANCIAL INFORMATION FOR BUDGETS - SEE PART II ASSUMPTIONS (RED TAB) MOST LIKELY NUMBERS AND ASSUMPTIONS SALES MANAGER PRIVATE INFORMATION Most likely sales July August September 600,000 $ 910,000 $ 475,000 $ Octobe 38 B $ 5 6 Part 1 Information 45% 20% PURCHASING MANAGER PRIVATE INFORMATION 3 Most likely cost of merchandise as a % of sales 3 Desired ending inventory as a percentage of next month's cost of sales 0 1 2 OPERATION MANAGER PRIVATE INFORMATION 3 Most likely shipping expenses as a percent of sales Most likely other expenses as a percent of sales 5 Salaries and wages (per month) Most likely advertising costs (per month) Most likely insurance costs (per month) 8 Depreciation expense (per month) 4 Part 1 Information 5.0% 8.0% 85,000 50,000 3,000 $ 25,000 6 7 9 0 Part 1 Information 30% 70% 50% 50% 1 FINANCE MANAGER PRIVATE INFORMATION 2 Percent sales collected in month of sale 3 Percent sales collected in month after sale 4 5 Percent of inventory purchases paid in month of purchase 6 Percent of inventory purchases paid in month after purchase 8 Percent of operating expenses paid in month of purchase 9 Percent of operating expenses paid in month after purchase 1 Desired minimum ending cash balance each month 2 Borrow in increments of 3 Monthly interest rate on borrowings (not compounded) 7 100% 0% 0 $ $ 35,000 1,000 1% 4 5 6 7 8 9 0 1 Other planned outlays of cash Capital expenditures Dividends GAGA July 200,000 $ 50,000 $ August September 90,000 $ $