Solomon 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 $310,000, 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. 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 $13,300. Assume that all purchases are made on account. Prepare an inventory purchases budget. 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. e. Budgeted selling and administrative expenses per month follow. W7Twe capital expenditures budget indicates that Solomon will spend $160.200 on October 1 for store fixtures, which are expected to have a $33,000 salvoge value and a two-year (24-month) useful life. Use this information to prepare o selling and administrative oxpenses budget. t. Uilitios 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 expenseb. Solomon borrows funds, in increments of $1,000, and repays them on the last day of the month. Repayments may be made in any amount avallable. 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 $25,000 cash cushion. Prepare a cash budget. . Prepare a pro forma income statement for the quarter. . Prepare a pro forma balance sheet at the end of the quarter. . Prepare a pro forma statement of cash flows for the quarter. Complete this question by entering your answers in the tabs below. October sales are estimated to be $310,000, of which 45 percent will be cash and 55 percent will be credit. The campany expects sales to increase at the rate of 20 percent per month. Prepore a sales budget. 9. Solomon 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 $25,000 cash cushion. Prepare a cash budget. 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. The company expects to collect 100 percent of the accounts recelvable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts. 1. Solomon 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 $25,000 cash cushion. Prepare a cash budget. h. Prepare a pro forma income statement for the quarter: 1. 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. 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 $13,300. Assume that all purchases are made on account. Prepare an inventory purchases budget