Thornton Company is a retail company that specializes in selling outdoor camping equipment. The company is considering opening a new store on October 1, 2019. 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:
d. The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Prepare a cash payments budget for inventory purchases.
e. Budgeted selling and administrative expenses per month follow:
Salary expense (fixed) | $ | 19,500 | |
Sales commissions | 4 | % of Sales | |
Supplies expense | 2 | % of Sales | |
Utilities (fixed) | $ | 2,900 | |
Depreciation on store fixtures (fixed)* | $ | 5,500 | |
Rent (fixed) | $ | 6,300 | |
Miscellaneous (fixed) | $ | 2,700 |
Use this information to prepare a selling and administrative expenses budget.
The company pays 70 percent of accounts payable in the month of purchase and the remaining 30 percent in the following month. Prepare a cash payments budget for inventory purchases. (Round your final answers to the nearest whole dollar amounts.)
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Prepare a selling and administrative expenses budget.
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Requirement D | Schedule of Cash Payment Budget for Purchases: | ||||
October | November | December | Total | ||
Payment for Current Month Payable | 70% | $ 246,960 | $ 270,088 | $ 274,442 | $ 791,490 |
Payment for Prior Month Payable | $ 105,840 | $ 115,752 | $ 221,592 | ||
Total Budgeted Payment for Inventory | $ 246,960 | $ 375,928 | $ 390,194 | $ 1,013,082 | |
Requirement E | Selling and Administrative Budget | ||||
October | November | December | Total | ||
Salary Expenses | $ 19,500 | $ 19,500 | $ 19,500 | $ 58,500 | |
Sales Commission | 4% of Sale | $ 16,000 | $ 20,800 | $ 27,040 | $ 63,840 |
Supplies Expense | 2% of Sale | $ 8,000 | $ 10,400 | $ 13,520 | $ 31,920 |
Utilities | $ 2,900 | $ 2,900 | $ 2,900 | $ 8,700 | |
Depreciation | $ 5,500 | $ 5,500 | $ 5,500 | $ 16,500 | |
Rent | $ 6,300 | $ 6,300 | $ 6,300 | $ 18,900 | |
Miscellaneous | $ 2,700 | $ 2,700 | $ 2,700 | $ 8,100 | |
Total Selling and Admin Expense | $ 60,900 | $ 68,100 | $ 77,460 | $ 206,460 |
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