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 for the first three months of operation As budget coordinator, you have been assigned the following tasks Required 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 Cash sales Sales on account Total budgeted sales $0 $0 $0 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 October November December Schedule of Cash Receipts Current cash sales Plus collections from A R Total collections $0 $0 $0 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 months 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 October November December Inventory Purchases Budget Inventory needed 0 0 0 Required purchases (on account) $0 $0 $0 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 ) October November December Schedule of Cash Payments Budget for Inventory Purchases Payment of current month's accounts payable Payment for prior month's accounts payable Total budgeted payment for inventory $0 $0 $0 Prepare a selling and administrative expenses budget October November December Selling and Administrative Expense Budget Salary expense Sales commissions Supplies expense Utilities Depreciation on store fixtures Rent Miscellaneous Total S A expenses $0 $0 $0 Budgeted selling and administrative expenses per month follow Salary expense (fixed) $ 19,000 Sales commissions 5 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 fixtures, which are expected to have a $30,000 salvage value and a three year (36 month) useful life

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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

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 for the first three months of operation. As budget coordinator, you have been assigned the following tasks.

Required

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

Cash sales

Sales on account

Total budgeted sales $0 $0 $0
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.

October November December

Schedule of Cash Receipts

Current cash sales

Plus collections from A/R

Total collections $0 $0 $0
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 months 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.

October November December

Inventory Purchases Budget

Inventory needed 0 0 0

Required purchases (on account) $0 $0 $0

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.)

	October	November	December
Schedule of Cash Payments Budget for Inventory Purchases
Payment of current month's accounts payable
Payment for prior month's accounts payable
Total budgeted payment for inventory	$0	$0	$0

Prepare a selling and administrative expenses budget.

	October	November	December
Selling and Administrative Expense Budget
Salary expense
Sales commissions
Supplies expense
Utilities
Depreciation on store fixtures
Rent
Miscellaneous
Total S&A expenses	$0	$0	$0

Budgeted selling and administrative expenses per month follow.


Salary expense (fixed)	$	19,000
Sales commissions		5	% 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 fixtures, which are expected to have a $30,000 salvage value and a three-year (36-month) useful life.