Required information The following information applies to the questions displayed below Perez 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 $220,000, of which 45 percent will be cash and 55 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 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 October November December Schedule of Cash Receipts Current cash sales Plus collections from A R Total collections 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 the next months cost of goods sold However, ending inventory of December is expected to be $13,000 Assume that all purchases are made on account Prepare an inventory purchases budget October November December Inventory Purchases Budget Inventory needed Required purchases (on account) D The company pays 80 percent of accounts payable in the month of purchase and the remaining 20 percent in the following month Prepare a cash payments budget for inventory purchases (Round your final answers to the nearest whole dollar amounts ) October November 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 payment for inventory E Budgeted selling and administrative expenses per month follow Salary expense (fixed) $ 19,000 Sales commissions 5 of Sales Supplies expense 2 of Sales Utilities (fixed) $ 2,400 Depreciation on store fixtures (fixed) $ 5,000 Rent (fixed) $ 5,800 Miscellaneous (fixed) $ 2,200 The capital expenditures budget indicates that Perez will spend $210,000 on October 1 for store fixtures, which are expected to have a $30,000 salvage value and a three year (36 month) useful life Use this information to prepare a selling and administrative expenses budget Prepare a selling and administrative expenses budget October November December Selling and Administrative Expense Budget Salary expense Sales commissions Supplies expense Utilities Depreciation on store fixtures Rent Miscellaneous Total S A expenses 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 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 expenses G Perez 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 $22,000 cash cushion Prepare a cash budget

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Required information [The following information applies to the questions displayed below.] Perez Company is a retail company that specializes in selling outdoor camping equipment. The

Required information

[The following information applies to the questions displayed below.]

Perez 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 $220,000, of which 45 percent will be cash and 55 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

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.

	October	November	December
Schedule of Cash Receipts
Current cash sales
Plus collections from A/R
Total collections

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 the next months cost of goods sold. However, ending inventory of December is expected to be $13,000. Assume that all purchases are made on account. Prepare an inventory purchases budget.

	October	November	December
Inventory Purchases Budget


Inventory needed

Required purchases (on account)

D. The company pays 80 percent of accounts payable in the month of purchase and the remaining 20 percent in the following month. Prepare a cash payments budget for inventory purchases. (Round your final answers to the nearest whole dollar amounts.)

	October	November	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 payment for inventory

E. Budgeted selling and administrative expenses per month follow. Salary expense (fixed) $ 19,000 Sales commissions 5 % of Sales Supplies expense 2 % of Sales Utilities (fixed) $ 2,400 Depreciation on store fixtures (fixed)* $ 5,000 Rent (fixed) $ 5,800 Miscellaneous (fixed) $ 2,200 *The capital expenditures budget indicates that Perez will spend $210,000 on October 1 for store fixtures, which are expected to have a $30,000 salvage value and a three-year (36-month) useful life. Use this information to prepare a selling and administrative expenses budget. Prepare a selling and administrative expenses budget.

	October	November	December
Selling and Administrative Expense Budget
Salary expense
Sales commissions
Supplies expense
Utilities
Depreciation on store fixtures
Rent
Miscellaneous
Total S&A expenses

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.

	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 expenses

G. Perez 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 $22,000 cash cushion. Prepare a cash budget.