You are the accountant tasked with creating the master budget for SRS Educational Supply Company. You have made your budget assumptions (see the red tab labeled Part II Assumptions) and are ready to prepare the following:

Sales Budget: Prepare the sales budget by month and in total. Prepare a schedule of expected cash collections from sales by month and in total.

Purchasing Budget: Prepare a merchandise purchases budget by month and in total. Prepare a schedule of expected cash disbursements for merchandise purchases by month and in total.

Admin budget: Prepare a selling and admin budget by month and in total. Add expected cash disbursements for selling and admin by month and in total.

Cash budget: Prepare a cash budget by month and in total

MOST LIKELY NUMBERS AND ASSUMPTIONS SALES MANAGER PRIYATE INFORMATION Most likely sales Auqust September October 600,000 910,000475,000 385,000 PURCHASING MANAGER PRIYATE INFORMATION Part 1nformation 45% 20% Most likely cost of merchandise as a % of sales Desired ending inventory as a percentage of newt month's cost of sa OPERATION MANAGER PRITATE INFORMATION Most likely shipping expenses as a percent of sales Most likely other ewpenses 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) 5.0% 8.0% 85,000 50,000 3,000 25,000 FINANCE MANAGER PRIYATE INFORMATION Percent sales collected in month of sale Percent sales collected in month after sale 30% 70% Percent of inventory purchases paid in month of purchase Percent of inventory purchases paid in month after purchase 50% 50% Percent of operating expenses pai Percent of operating e d in month of purchase xpenses paid in month after purcha 100% 0% se Desired minimum ending cash balance each month Borrow in increments of 35,000 1,000 1% Monthly interest rate on borrowings (not c Other planned outlays of cash Auqust September Capital expenditures 200,000 $90,000 $ 50,000 $ SRS Educational Suppl Compang 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 50,000 448,000 Liabilities and Equit Liabilites ccounts payable Notes payable 30,000 Total liabilities Stockholder's equity Capital stock Retained earnings Total equity TOTAL LIABILITIES AND EQUITY $130,000 420,000 1178000 130800m Sales Budget AuqustSeptember uarte Schedule of Cash Collections JulyAuqust September Quarter June sales (AIR From Beqinninq Balance Sheet) July sales-Collected in Current Month July sales Collected in Following Month Auqust sales Collected in Current Month Auqust sales -Collected in Following Month September sales-Collected in Current Month Total Epected Cash Collections TotalSales hr the r Ate aSoramber Sas Swai Inventory Purchase Budget ugust September October Sales Cost of Merchandise as % of Sales Budgeted Cost of Merchandise Sold Following Month's COGS Desired Ending Inventory % Desired Ending Inuentory Dollars Budgeted Cost of Merchandise Sold Plus Desired Ending Inventory Total Inventory Needs Less Beqinning Inventory Required Purchases Schedule of Expeoted Cash Disbusements-Purchases July AuqustSeptember Quarter June Purchases AP From Balance Sheet July Purchases Auqust Purchases September Purchases Total Disbursements Costzhantis Sot Qane Eah ano anr EnvWNTA eranter Selling and Administrative Budget July Auqust Septemb Quarter Sales Shipping as a Percentage of Sales Other Expenses as a Percentage of Sales Variable Expenses: Shipping Other Expenses Total Variable Expenses Fiked Expenses: Salaries and wages Advertisig Prepaid Insurance Lepreciation Total Fi ed Expesnes Total Selling and Admin Epense:s Less Honcash ltems IDepreciation and Prepaid Ins Total Cash Disbursements Prepaid surance That is Expensed During the Quarter exrecveicon Exspense Fecrowred LRwing the Cvarte Cash Budget July AuqustSeptember Quarter Cash Balance: Beginning Add Cash Collections From Sales Budget Total cash Available Less Cash Disbursements For Inventory lFrom Furchasing Budget For Operating Expenses (From Sellin and Admin Budget) For Equipment For Cash Dividends For Interest (From Previous Month's Borrowing Total Cash Disbursements Financing Borrowing Repayment Total Financing ash Balance: Endinq Outstanding Loan Balance Interest on Borrowin Due the Following Quarterl SRS Educational Supplies Company Budgeted Income Statement For the Quarter Ended September 30 Sales Cost of goods Sold Gross Margin Selling and administrative expenses Shipping Other Salaries and wages Advertising repaid insurance Depreciation Net operating incomes Less interest expense #REF! #REF! #REFI From sales budget #REF! #REF! r #REF! #REF! #REF! #REF! From operating budqet #REF! #REFI #REF! From cash budget Net income SRS Educational Supply Company Balance Sheet September 30 Assets Current asse Cash Accounts receivable Inventory Prepaid insurance $0 #REF! #REF! #R From cash budget From sales budget collections From purchase budget Total current assets #REF! #REF! Buildings and equipment [net,] Beq equip+ purch-depr Total assets Liabilities and Equity Accounts payable Notes Payable Stockholder's equity Capital stock Retained earnings Total liability and equity #REF! From purchase budget- cash disb From cash budget #REF! 420,000 #REF! From beqbalance sheet Beq RE +NI dividends