Zachary Company is a retail company that specializes in selling outdoor camping equipment. The company is considering
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Question:
Zachary Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October year 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
October sales are estimated to be $ of which percent will be cash and percent will be credit. The company expects sales to increase at the rate of percent per month. Prepare a sales budget.
The company expects to collect percent of the accounts receivable generated by credit sales in the month following the sale. Prepare a schedule of cash receipts.
The cost of goods sold is percent of sales. The company desires to maintain a minimum ending inventory equal to percent of the next months cost of goods sold. However, ending inventory of December is expected to be $ Assume that all purchases are made on account. Prepare an inventory purchases budget.
The company pays percent of accounts payable in the month of purchase and the remaining percent in the following month. Prepare a cash payments budget for inventory purchases.
Budgeted selling and administrative expenses per month follow.
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