The Culturemark store is a local store that sells CDs, DVDs and books.

You are in charge of preparing the store's budget for the first quarter of 2022.

All the data exclude VAT when applicable and are in K€

	January	February	March	April
Net sales (K€)	15 650	14 600	15 300	13 100
merchandise consumption (K€)	6 050	7 510	10 060	11 300

a) For inventories:

- At the end of January, the manager wants to have 15 days of the average February consumption in stock,

- at the end of February, 23 days of the average consumption for March,

- at the end of March, 21 days of the average consumption for April

We consider that each month has 30 days.

We consider that the inventories as well as the consumptions are valued at the purchase price.

1. The average VAT rate for sales and purchase of merchandise is 5%.

2. Monthly external services expenses amount to K€700 (excluding VAT). They are paid one month after the service has been executed. The VAT rate for those expenses is 20%.

3. 70% of merchandise purchased is paid one month after the purchase and 30% two months after the purchase.

4. Monthly gross salaries amount to K€600. They are paid each month without payment delays.

5. Employer social charges represent 40% of gross salaries. Employee social charges represent 20% of gross salaries. Social charges are paid one month after the one it concerns.

6. Other expenses represent K€200 per month and are paid the same month. They are fixed expenses. and are not subject to VAT.

7. Monthly depreciations for fixed assets represent K€230.

8. The store plans to purchase promotional equipment for an amount of K€ 1,800. This equipment will be put into service in February and will be depreciated on a straight-line basis (linearly) over 3 years. Payment will be made for 50% in March and 50% in April. The VAT rate is 20%.

i) The long-term loan (see opening balance sheet below) gives rise to monthly payments of K€130, broken down as follows

	January	February	March
Capital repayment (K€)	80	85	90
Interests (K€)	50	45	40

Interests are not subject to VAT.

1. The forecast balance sheet as of 1/1/2022 will in principle be as follows

ASSETS (K€)			SE AND LIABILITIES (K€)
Gross fixed assets		17,600	Capital		3,000
Depreciation		6,200	Reserves		900
Net fixed assets		11,400
			Long-term loan		4,600
Inventory (merchandise)		6,200
			Payables (merchandise)		23,100
Bank		15,400	Payables (external services)		840
			Social organization		360
			State, VAT		200
TOTAL		33,000	TOTAL		33 000

Information about the balance sheet (1/1/2022)

1. Suppliers of merchandise will be paid 60% in January 2022 and 40% in February 2022
2. Suppliers of external services will be paid in January 2022
3. Debt to social organizations will be paid in January 2022
4. The VAT payable is paid in January 2022

Questions :

Prepare for the first quarter:

• The sales monthly budget
• The purchases monthly budget
• The other expenses monthly budget
• The budgeted income statement
• The monthly VAT budget
• The monthly cash budget
• The budgeted balance sheet.

Answer rating: 100% (QA)

To prepare the first quarter budget for The Culturemark store we will calculate the following 1 Sales Monthly Budget January 15650 February 14600 Marc... View the full answer