Walton Company is a retall 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 $390,000, of which 40 percent will be cash and 60 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 recelvable 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 $13,700. Assume that all purchases are made on account. Prepare an inventory purchases budget d. The company pays 60 percent of accounts payable in the month of purchase and the remaining 40 percent in the following month. . e. Budgeted selling and administrative expenses per month follow nes Salary expensixed) 519,700 los cono 4 otto supplies On 23 al Sales Co Ltd 3.100 Deprecation on store tid 5700 Bet tied 1,500 Rocellaneous tixed 5 2.900 The capital expenditures budget indicates that Walton will spend $173,800 on October 1 for store fixtures, which are oxpected to have a 537.000 salvage value and a two-year (24-month) useful life Use this information to prepare o selling and administrative expenses budget t. 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 9. Walton bortows funds, in increments of $1000, and repays them on the last day of the month Repayments may be made in any amount available. The company also pays it vendors on the last day of the month It pays interest of 2 percent per month in con on the last day of the month. To bo prudent, the company desires to maintain a $29.000 cash cushion Prepare a cash budget h. Proforma in statement in the laten ME WALTON COMPANY Pro Forma Income Statement For the Quarter Ended December 31, Year 1 Sales revenue $ 946,400 Cost of goods sold 567,840 Gross margin 378,560 Selling and administrative expenses 175,448 Operating income 203 112 interest expense 719 Net income $ 202,393