Problem 14-23 Part 1 Required a. October sales are estimated to be $300.,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 20 percent per month. Prepare a sales budget. Prepare a schedule of cash receipts. the next month's cost of goods sold. However, ending inventory of December is expected to be $13,800. Assume that all purchases b. The company expects to collect 100 percent of the accounts receivable generated by credit sales in the month following the sale 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 are made on account. Prepare an inventory purchases budget 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. 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) $19,80 4% of Sales 2% of Sales $ 3,200 $ 5,880 $ 6,688 $ 3,80 The capital expenditures budget indicates that Zachary will spend $246,800 on October 1 for store fixtures, which are expected to have a $38,000 salvage value and a three-year (36-month) useful life Use this information to prepare a selling and administrative expenses budget. f. 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. g. Zachary 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 $30,000 cash cushion. Prepare a cash budget. Required information 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 zachary 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 $30,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign.) show less h Budget October November ning cash balance Add: Cash receipts Cash available Less: Payments 120,000 120,000 Interest expense For inventory purchases For selling and administrative expenses Purchase of store fixtures 246,800 246 800 Total budgeted payments Payments minus receipts 126,800) Surplus (shortage) Financing activity nding cash balance S (126,800) S