Perez Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, year 1. The company president formed a planning committee to prepare a master budget forthe rst three months of operation. As budget coordinator, you have been assigned the following tasks. Required a. October sales are estimated to be $220,000, 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. b. 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. c. 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 $13,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. d. 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. e. Budgeted selling and administrative expenses per month follow. Salary expense (fixed) $19,000 Sales commissions 595 of Sales Supplies expense 2% of Sales Utilities (fixed) $ 2,400 Depreciation on store fixtures (fixed)* $ 5,000 Rent (fixed) $ 5,800 Miscellaneous (fixed) $ 2,200 , *The capital expenditures budget indicates that Perez will spend $210,000 on October 1 for store xtures, which are expected to have a $30,000 salvage value and a three-year (36-month) useful life. Use this information to prepare a selling and administrative expenses budget. Use this information to prepare a selling and administrative expenses budget. f. Utilities and sales commissions are paid the month afterthey 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. 9. Perez 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 of1 percent per month in cash on the last day ofthe month. To be prudent, the company desires to maintain a $22,000 cash cushiont Prepare a cash budget h. Prepare a proforma income statement for the quarter. i. Prepare a proforma balance sheet at the end ofthe quarter. j. Prepare a proforma statement of cash flows for the quarter. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Required G Required H RequiredI Required J October sales are estimated to be $220,000, 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. October November December Sales Budget Sales on account Total budgeted sales Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F Required G Required H Required 1 Required J 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. Plus collections from AIR Total collections Required A Required B Required C Required D Required E Required F Required G Required H Required I RequiredJ 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 $13,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. Inventory needed Required purchases (on account) Required A Required B Required C Required D Required E Required F Required G Required H Required 1 Required J 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. (Round your final answers to the nearest whole dollar amounts.) Schedule of Cash Payments Budget for Inventory Purchases Payment of current month's accounts payable _ _ Payment for prior month 3 accounts payable _ _ Total budgeted payments for inventory mm Required A Required B Required C Required D Required E Required F Required G Required H Required I Required J Prepare a selling and administrative expenses budget. Selling and Administrative Expense Budget Sales commissions Supplies expense Utilities Depreciation on store fixtures __ Miscellaneous Total S&A expenses Required A Required B Required C Required D Required E Required F Required G Required H Required I Required] 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. Schedule of Cash Payments for S&A Expenses Salary expense Sales commissions Supplies expense Utilities Depreciation on store fixtures Miscellaneous Total payments for S&A expenses Required A Required B Required C Required D Required E Required F Required G Required H Required I Required J Perez 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 $22,000 cash cushion. Prepare a cash budget. (Any repayments should be indicated with a minus sign.) Show lessA Total budgeted disbursements 0- Section 3 Financing Activities Required A Required B Required C Required D Required E Required F Required G Required H Required I Required J Prepare a pro forma income statement for the quarter. RequiredA Required B Required C Required D Required E Required F Required G Required H 3 RequiredI E Required] Prepare a pro forma balance sheet at the end of the quarter. (Amounts to be deducted should be indicated by a minus sign.) Total assets Liabilities Total liabilities and equily Required A Required B Required C Required D Required E Required F Required G Required H Required I Required J Prepare a pro forma statement of cash flows for the quarter. (Cash outflows should be indicated with a minus sign.) PEREZ COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, Year 1 Cash flows from operating activities Net cash flows from operating activities 0 Cash flows from investing activities Cash flow from financing activities $ 0