Preparing a master budget for retail company with no beginning account balances Problem 7-23A LO 7-2, 7-3, 7-4, 7-5,7-6 Camden Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. The company president formed a planning committee to prepare a master budget for the first three months of operation. As budget co- ordinator, you have been assigned the following tasks: CHECK FIGURES c. Dec. purchases: $84,732 g. Nov. surplus before financing activities: $30,486 Required Round all computations to the nearest whole dollar a. October sales are estimated to be $125,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 8 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 $6,000. Assume that all purchases are made on account. Prepare an inventory purchases budget. b. c. d. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Prepare a cash payments budget for inventory purchases 336 Chapter7 e. Budgeted selling and administrative expenses per month follow Salary expense (fixed) Sales commissions Supplies expense Utilities (fixed) Depreciation on store fixtures (fixed) Rent (fixed) Miscellaneous (fixed) The capital expenditures budget indicates that Camden will spend $82,000 on October 1 for store fixtures, which are expected to have a $10,000 salvage value and a three-year (36-month) useful life. $9,000 5% of Sales 2% of Sales $700 $2,000 $2,400 $600 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 ad ministrative expenses f