p$9\mathrm{.}79$B Prepare comprehensive budgets for a retailer $($Learning Objectives $2,3,\backslash$& $4)$ Dollar Discount Store is a local discount store with the following information: $-$ October sales are projected to be $\backslash (\backslash$$ $300,000\backslash ).-$ Sales are projected to increase by $\backslash (10\backslash \%\backslash )$ in November and another $\backslash (20\backslash \%\backslash )$ in December and then return to the October level in January. $-\backslash (25\backslash \%\backslash )$ of sales are made in cash, while the remaining $\backslash (75\backslash \%\backslash )$ are paid by credit or debit cards. The credit card companies and banks $($debit card issuers$)$ charge a $\backslash (2\backslash \%\backslash )$ transaction fee and deposit the net amount $($sales price less the transaction fee$)$ in the store's bank account daily. The store does not accept checks. Because of the payment mechanisms, there is no risk of nonpayment or bad$-$debts. $-$ The store's gross profit is $\backslash (25\backslash \%\backslash )$ of its sales revenue. $-$ For the next several months, the store wants to maintain an ending merchandise inventory equal to $\backslash (\backslash$$ $5,000+20\backslash \%\backslash )$ of the next month's cost of goods sold. All purchases for merchandise are made on account and paid in the month following the purchase. The September $30$ inventory is expected to be $\backslash (\backslash$$ $50,000\backslash ).-$ Expected monthly operating expenses and details about payments include the following. $-$ Wages of store workers should be $\backslash$$$9,000$ per month and are paid on the last day of each month. $-$ Utilities expense is expected to be $\backslash (\backslash$$ $1,200\backslash )$ per month in September, October, and November. $-$ Utilities expense is expected to be $\backslash (\backslash$$ $2,000\backslash )$ per month during the colder months of December, January, and February. $-$ All utility bills are paid the month after incurred. $-$ Property tax is $\backslash (\backslash$$ $24,000\backslash )$ per year and is paid semiannually each December and June. $-$ Property and liability insurance is $\backslash (\backslash$$ $12,000\backslash )$ per year and is paid semiannually each January and July. $-$ Depreciation expense is $\backslash (\backslash$$ $144,000\backslash )$ per year; the straight$-$line method is used. $-$ Transaction fees, as stated earlier, are $\backslash (2\backslash \%\backslash )$ of credit and debit card sales. $-$ Cash dividends of $\backslash (\backslash$$ $225,000\backslash )$ are to be paid in December. $-$ Assume the cash balance on October $31$ is $\backslash (\backslash$$ $10,000\backslash ).$ The company wants to maintain a cash balance of at least $\backslash (\backslash$$ $10,000\backslash )$ at the end of every month. $-$ The company has arranged a line of credit with a local bank at a $\backslash (5\backslash \%\backslash )$ interest rate. There is no outstanding debt as of October $31.$ Prepare the following budgets for November and December: Requirements $1.$ Sales budget $2.$ Cost of goods sold, inventory, and purchases budget $3.$ Operating expense budget $4.$ Budgeted income statement $5.$ Cash collections budget $6.$ Cash payments budget $7.$ Combined cash budget