Required information
Problem 14-23 Preparing a master budget for retail company with no beginning account balances LO 14-2, 14-3, 14-4, 14-5, 14-6
[The following information applies to the questions displayed below.]
Campbell 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 coordinator, you have been assigned the following tasks:
Problem 14-23 Part 2
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Prepare a pro forma income statement for the quarter.
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Prepare a pro forma balance sheet at the end of the quarter.
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Prepare a pro forma statement of cash flows for the quarter.
Required information Problem 14-23 Preparing a master budget for retail company with no beginning account balances LO 14 2, 14-3, 14-4, 14-5,14-6 [The following information applies to the questions displayed below. Campbell 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 coordinator, you have been assigned the following tasks: roblem 14-23 Part 1 equired October sales are estimated to be $320,000, of which 35 percent will be cash and 65 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 $14,000. Assume that all purchases . 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. . The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 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) $20,000 5% of Sales 2% of Sales $ 3,400 6,000 $ 6,800 $ 3,200 The capital expenditures budget indicates that Campbell will spend $256,000 on October 1 for store fixtures, which are expected to have a $40,000 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 . Campbell 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 $32,000 cash cushion. Prepare a cash budget. Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below. Required A Required B Required CRequired D Required E Required F Required G October sales are estimated to be $320,000, of which 35 percent will be cash and 65 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 $ 112,000 134,400 S 161,280 208,000 249,600299,520 $ 320,000 $ 384,000 460,800 Required A Required B > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Required F RequiredG 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 NovemberDecember Schedule of Cash Receipts Current cash sales Plus collections from A/R Total collections $ 112,000 134,400 161,280 S 112,000 342,400 410,880 Required A 0208,000249,600 Required C Answer is complete but not entirely correct Complete this question by entering your answers in the tabs below Required A Required B Required CRequired D Required E Required F Required G 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 $14,000. Assume that all purchases are made on account. Prepare an inventory purchases budget October November December Inventory Purchases Budget Budgeted cost of goods sold Plus: Desired ending inventory Inventory needed Less: Beginning inventory Required purchases (on account) $ 192,000 230,400 276,480 14,000 290,480 27,648 $ 215,040 235,008 262,832 23,040 215,040 27,648 258,048 23,040 KRequired B Required D> Answer is complete but not entirely correct. 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 The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the following month. Prepare a cash payments budget for inventory purchases. (Round your final answers to the nearest whole dollar amounts.) October Novem 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 payments for inventory $129,024S 141,005 157,699 08094,003 $ 129,024 227,021 251,702 Required C Required E Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Required A Required B Required Required D Required ERequired F Required G 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 October November December Schedule of Cash Payments for S&A Expenses Salary expense Sales commissions Supplies expense Utilities Depreciation on store fixtures Rent Miscellaneous Total payments for S&A $20,000 20,000 20,000 9,200 9,216 ,400 16,000 7,680 ,400 6,400 6,800 3.200 $ 36,400 57,080 61,816 6,800 3.200 6,800 3.200 expenses Required E Required G > Prepare a pro forma balance sheet at the end of the quarter. (Amounts to be deducted should be indicated by a minus sign.) CAMPBELL COMPANY Pro Forma Balance Sheet December 31, 2019 Assets Accounts receivable Cash Inventory Total assets Liabilities Equity Total liabilities and equity Prepare a pro forma statement of cash flows for the quarter. (Amounts to be deducted should be indicated by a minus sign.) CAMPBELL COMPANY Pro Forma Statement of Cash Flows For the Quarter Ended December 31, 2019 Cash flows from operating activities Net cash flows from operating activities Cash flows from investing activities Cash flow from financing activities
