Thornton 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:

1. Budgeted selling and administrative expenses per month follow:

Salary expense (fixed)	$	19,500
Sales commissions		4	% of Sales
Supplies expense		2	% of Sales
Utilities (fixed)	$	2,900
Depreciation on store fixtures (fixed)*	$	5,500
Rent (fixed)	$	6,300
Miscellaneous (fixed)	$	2,700

1. *The capital expenditures budget indicates that Thornton will spend $167,000 on October 1 for store fixtures, which are expected to have a $35,000 salvage value and a two-year (24-month) useful life.

Use this information to prepare a selling and administrative expenses budget.

6. 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.

7. Thornton 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 $27,000 cash cushion. Prepare a cash budget.

   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	$0	$0	$0

Thornton 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 $27,000 cash cushion. Prepare a cash budget. (Any repayments/shortage which should be indicated with a minus sign.)

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Cash Budget
	October	November	December
Cash available	0	0	0
Less: Payments
Total budgeted payments	0	0	0
Payments minus receipts
	0	0	0
Financing activity
	$0	$0	$0