Required information (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, 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 a. October sales are estimated to be $370,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 30 percent per month. Prepare a sales budget. b. 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. c. The cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $12,300. Assume that all purchases 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) $18,300 4% of Sales 2% of Sales $ 1,700 $ 4,300 $ 5,100 $ 1,500 *The capital expenditures budget indicates that Campbell will spend $126,200 on October 1 for store fixtures, which are expected to have a $23,000 salvage value and a two-year (24-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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 October sales are estimated to be $370,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 30 percent per month. Prepare a sales budget. October November December $ $ Sales Budget Cash sales Sales on account Total budgeted sales 148,000 222,000 370,000 192,400 $ 288,600 481,000 $ 250,120 375,180 625,300 $ $ Required A Required B 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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 148,000 op 148,000 192,400 222,000 414,400 250,120 288,600 538,720 $ $ $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $12,300. 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) 259,000 67,340 326,340 of 326,340 336,700 87,542 424,242 67,340 356,902 437,710 12,300 450,010 87,542 362,468 $ $ $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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. (Round your final answers to the nearest whole dollar amounts.) November December October Schedule of Cash Payments Budget for Inventory Purchases Payment of current month's accounts payable $ 228,438 Payment for prior month's accounts payable 0 Total budgeted payment for inventory $ 228,438 $ 249,831/ $ 97,902 347,733 $ 253,728 107,071 360,799 $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 Prepare a selling and administrative expenses budget. November December $ October Selling and Administrative Expense Budget Salary expense $ 18,300 Sales commissions 14,800 Supplies expense 7,400 Utilities 1,700 Depreciation on store fixtures 4,300 Rent 5,100 Miscellaneous 1,500 Total S&A expenses $ 53,100 18,300 $ 19,240 9,620 1,700 4,300 5,100 1,500 59,760 $ 18,300 25,012 12,506 1,700 4,300 5,100 1,500 68,418 $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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. November December $ $ October Schedule of Cash Payments for S&A Expenses Salary expense $ 18,300 Sales commissions of Supplies expense 7,400 Utilities 01 Depreciation on store fixtures 01 Rent I 5,100 Miscellaneous 1,500 Total payments for S&A expenses $ 32,300 18,300 14,800 9,620 1,700 18,300 19,240 12,506 1,700 5,100 1,500 51,020 5,100 1,500 58,346 $ $ Required A Required B Required C Required D Required E Required F Required G 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign.) Show less Cash Budget October November December | $ 0 148,000 148,000 414,400 414,400 538,720 538,720 Section 1: Cash Receipts Beginning cash balance Add: Cash receipts Total Cash available Section 2: Cash Payments | For inventory purchases For selling and administrative expenses Interest expense Purchase of store fixtures 228,438 32,300 3 47,733 51,020 360,799 58,346 126,200 386,938 398,753 419,145 Total budgeted disbursements Section 3: Financing Activities Surplus (shortage) Borrowing (repayment) Ending cash balance (238,938) 15,647 119,575 $ (238,938) $ 15,647 $ 119,575 h. Prepare a pro forma income statement for the quarter. i. Prepare a pro forma balance sheet at the end of the quarter. j. Prepare a pro forma statement of cash flows for the quarter. Complete this question by entering your answers in the tabs below. Required H Required I Required) Prepare a pro forma income statement for the quarter. CAMPBELL COMPANY Pro Forma Income Statement For the Quarter Ended December 31, year 1 Sales revenue $ 1,476,300 Cost of goods sold 1,033,410 Gross margin 442,890 Selling and administrative expenses 181,278 Operating income 261,612 Interest expense Net income $ 261,612 Required H Required I > 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, year 1 Assets Cash $ 15,000 375,180 12,300 $ 126,200 (12,900) Accounts receivable Inventory Store fixtures Accumulated depreciation Book value of fixtures Total assets Liabilities Accounts payable Utilities payable Sales commissions payable 113,300 515,780 $ 107,071 1,700 25.012 Line of credit liability Equity Retained earnings Total liabilities and equity $ 133,783 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, year 1 Cash flows from operating activities i Cash receipts from customers $ Cash payments for inventory Cash payments for selling and administrative expenses I Cash payments for interest expense Net cash flows from operating activities Cash flows from investing activities Cash payment for store fixtures Cash flow from financing activities 1,101,120 (936,970) (141,666) | $ 22,484 (126,200) Net inflow from line of credit Net increase in cash Plus: Beginning cash balance Ending cash balance Required information (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, 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 a. October sales are estimated to be $370,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 30 percent per month. Prepare a sales budget. b. 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. c. The cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $12,300. Assume that all purchases 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) $18,300 4% of Sales 2% of Sales $ 1,700 $ 4,300 $ 5,100 $ 1,500 *The capital expenditures budget indicates that Campbell will spend $126,200 on October 1 for store fixtures, which are expected to have a $23,000 salvage value and a two-year (24-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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 October sales are estimated to be $370,000, of which 40 percent will be cash and 60 percent will be credit. The company expects sales to increase at the rate of 30 percent per month. Prepare a sales budget. October November December $ $ Sales Budget Cash sales Sales on account Total budgeted sales 148,000 222,000 370,000 192,400 $ 288,600 481,000 $ 250,120 375,180 625,300 $ $ Required A Required B 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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 148,000 op 148,000 192,400 222,000 414,400 250,120 288,600 538,720 $ $ $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 cost of goods sold is 70 percent of sales. The company desires to maintain a minimum ending inventory equal to 20 percent of the next month's cost of goods sold. However, ending inventory of December is expected to be $12,300. 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) 259,000 67,340 326,340 of 326,340 336,700 87,542 424,242 67,340 356,902 437,710 12,300 450,010 87,542 362,468 $ $ $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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. (Round your final answers to the nearest whole dollar amounts.) November December October Schedule of Cash Payments Budget for Inventory Purchases Payment of current month's accounts payable $ 228,438 Payment for prior month's accounts payable 0 Total budgeted payment for inventory $ 228,438 $ 249,831/ $ 97,902 347,733 $ 253,728 107,071 360,799 $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 Prepare a selling and administrative expenses budget. November December $ October Selling and Administrative Expense Budget Salary expense $ 18,300 Sales commissions 14,800 Supplies expense 7,400 Utilities 1,700 Depreciation on store fixtures 4,300 Rent 5,100 Miscellaneous 1,500 Total S&A expenses $ 53,100 18,300 $ 19,240 9,620 1,700 4,300 5,100 1,500 59,760 $ 18,300 25,012 12,506 1,700 4,300 5,100 1,500 68,418 $ 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. 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. 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 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. November December $ $ October Schedule of Cash Payments for S&A Expenses Salary expense $ 18,300 Sales commissions of Supplies expense 7,400 Utilities 01 Depreciation on store fixtures 01 Rent I 5,100 Miscellaneous 1,500 Total payments for S&A expenses $ 32,300 18,300 14,800 9,620 1,700 18,300 19,240 12,506 1,700 5,100 1,500 51,020 5,100 1,500 58,346 $ $ Required A Required B Required C Required D Required E Required F Required G 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 2 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $15,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign.) Show less Cash Budget October November December | $ 0 148,000 148,000 414,400 414,400 538,720 538,720 Section 1: Cash Receipts Beginning cash balance Add: Cash receipts Total Cash available Section 2: Cash Payments | For inventory purchases For selling and administrative expenses Interest expense Purchase of store fixtures 228,438 32,300 3 47,733 51,020 360,799 58,346 126,200 386,938 398,753 419,145 Total budgeted disbursements Section 3: Financing Activities Surplus (shortage) Borrowing (repayment) Ending cash balance (238,938) 15,647 119,575 $ (238,938) $ 15,647 $ 119,575 h. Prepare a pro forma income statement for the quarter. i. Prepare a pro forma balance sheet at the end of the quarter. j. Prepare a pro forma statement of cash flows for the quarter. Complete this question by entering your answers in the tabs below. Required H Required I Required) Prepare a pro forma income statement for the quarter. CAMPBELL COMPANY Pro Forma Income Statement For the Quarter Ended December 31, year 1 Sales revenue $ 1,476,300 Cost of goods sold 1,033,410 Gross margin 442,890 Selling and administrative expenses 181,278 Operating income 261,612 Interest expense Net income $ 261,612 Required H Required I > 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, year 1 Assets Cash $ 15,000 375,180 12,300 $ 126,200 (12,900) Accounts receivable Inventory Store fixtures Accumulated depreciation Book value of fixtures Total assets Liabilities Accounts payable Utilities payable Sales commissions payable 113,300 515,780 $ 107,071 1,700 25.012 Line of credit liability Equity Retained earnings Total liabilities and equity $ 133,783 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, year 1 Cash flows from operating activities i Cash receipts from customers $ Cash payments for inventory Cash payments for selling and administrative expenses I Cash payments for interest expense Net cash flows from operating activities Cash flows from investing activities Cash payment for store fixtures Cash flow from financing activities 1,101,120 (936,970) (141,666) | $ 22,484 (126,200) Net inflow from line of credit Net increase in cash Plus: Beginning cash balance Ending cash balance