Using the above information complete the following sales budget and purchasing budget.
MOST LIKELY NUMBERS AND ASSUMPTIONS SALES MANAGER PRIVATE INFORMATION Most likely sales $ July 600,000 $ August September 910,000 $ 475,000 $ October 385.000 HON PURCHASING MANAGER PRIVATE INFORMATION Most likely cost of merchandise as a % of sales Desired ending inventory as a percentage of next month's cost of sales Part 1 Information 45% 20% OPERATION MANAGER PRIVATE INFORMATION Most likely shipping expenses as a percent of sales Most likely other expenses as a percent of sales Salaries and wages (per month) Most likely advertising costs (per month) Most likely insurance costs (per month) Depreciation expense (per month) Part 1 Information 5.0% 8.0% 85,000 50,000 3,000 $ 25,000 FINANCE MANAGER PRIVATE INFORMATION Percent sales collected in month of sale Percent sales collected in month after sale Part 1 Information 30% - Percent of inventory purchases paid in month of purchase Percent of inventory purchases paid in month after purchase 50% 50% : - Percent of operating expenses paid in month of purchase Percent of operating expenses paid in month after purchase 100% 0% $ Desired minimum ending cash balance each month Borrow in increments of Monthly interest rate on borrowings (not compounded) 35,000 1,000 1% DUA Other planned outlays of cash Capital expenditures Dividends July 200,000 $ 50,000 $ August September 90,000 $ SRS Educational Supply Company Balance Sheet Previous Year End Assets $ Current assets: Cash Accounts receivable Inventory Prepaid insurance Total current assets Buildings and equipment (net) TOTAL ASSETS 40,000 340,000 50.000 18.000 $ $ $ 448,000 860.000 1,308,000 Liabilities and Equity GA 130,000 $ 130,000 Liabilites Accounts payable Notes payable Total liabilities Stockholder's equity Capital stock Retained earnings Total equity TOTAL LIABILITIES AND EQUITY $ 420,000 758.000 $ $ 1,178,000 1,308,000 Sales Budget July August September Quarter Sales Sales Schedule of Cash Collections August September Quarter July June sales (A/R From Beginning Balance Sheet) July sales - Collected in Current Month July sales - Collected in Following Month August sales - Collected in Current Month August sales - Collected in Following Month September sales - Collected in Current Month Total Expected Cash Collections Total Sales for the Quarter A/R at the end of the Quarter (September Sales Still not Collected) Inventory Purchase Budget July August September October Sales Cost of Merchandise as % of Sales Budgeted Cost of Merchandise Sold Following Month's COGS Desired Ending Inventory % Desired Ending Inventory Dollars Budgeted Cost of Merchandise Sold Plus Desired Ending Inventory Total Inventory Needs Less Beginning Inventory Required Purchases Schedule of Expected Cash Disbursements - Purchases July August September Quarter June Purchases (A/P From Balance Sheet) July Purchases August Purchases September Purchases Total Disbursements Cost of Merchandise Sold for the Quarter Ending Inventory at the end of the Quarter Ending A/P at the end of the Quarter
