$21,00070,000$ Inventory $45,000$ Store equipment $300,000$ Accumulated depreciation $$78,800$ Accounts payable $77,000$ Line of credit loan $200,000$ Common stock $60,000$ Retained earnings $20,200$ Totals $436,000436,000$

Requirements

a$-1.$ Based on the following information, prepare a sales budget and a schedule of cash receipts for October, November, and December. Sales for October are expected to be $$240,000,$ consisting of $$50,000$ in cash and $$190,000$ on credit. The company expects sales to increase at the rate of $15$ percent per month. All accounts receivable are collected in the month following the sale.

$1.$b$.$ Based on the following information, prepare a purchases budget and a schedule of cash payments for inventory purchases for October, November, and December. The inventory balance as of October $1$ was $$45,000.$ Cost of goods sold for October is expected to be $$77,000.$ Cost of goods sold is expected to increase by $10$ percent per month. The company expects to maintain a minimum ending inventory equal to $25$ percent of the current month cost of goods sold. Seventy percent of accounts payable is paid in the month that the purchase occurs; the remaining $30$ percent is paid in the following month.