Prepare the following budgets for January

1. Sales budget

2. Purchases Budget

3. Selling & Admin Expense Budget

4. Cash Budget

5. Budget/ Proforma Income Statement

6. Budget/ Proforma Balance Sheet

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1. Sales are expected to be $80,000 in January, $100,000 in February, and $105,000 in March. 2. All sales are on credit and it collects 20% of all sales in the month of the sale, the remaining 80% in the month after the sale. 3. The cost of goods sold is equal to 40% of sales. 4. The company likes to keep an ending inventory on hand equal to 15% of next month's cost of goods sold. 5. All purchases of inventory are on account, and the company pays for 60% of all purchases in the month of the purchase, 40% in the month after the purchase. 6. The company pays its sales force a commission equal to 3% of sales. 7. The company also believes that its miscellaneous expense is equal to $500 plus 2% of sales. 8. Rent is $2,000 per month, Supplies are $600 per month, and Depreciation is $1,800 per month. 9. On October 1 of last vear, the company purchased an insurance policy covering 12 months for $14,400. 10. All selling and administrative expenses are paid in the month they are incurred except for commissions that are paid in the month after they are earned and the insurance which is paid as stated in #9. 11. The company purchased $40,000 of Land on January 18th. They paid cash for the land. 12. Interest on long-term debt is equal to 1% of the beginning balance and is paid each month. The company must maintain a minimum balance in cash of $15,000 and will use any cash surplus to pay down long-term debt. The company borrows cash in $1,000 increments. 13. The company's Board of Directors declared a cash dividend of $400 on January 4ta. The dividend will be paid on February 10th. 14. The company had a beginning balance sheet (as of January 1) as follows: Prepare the following budgets for January: 1. Sales budget 2. Purchases budget 3. Selling \& Admin Expense budget 4. Cash Budget 5. Budget/Proforma Income Statement 6. Budget/Proforma Balance Sheet