Question

Data Table • October sales are projected to be $390,000. Sales are projected to increase by 10% in November and another 25% in December and then return to the October level in January. 20% of sales are made in cash while the remaining 80% are paid by credit or debit cards. The credit card companies and banks (debit card issuers) charge a 1% 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 non-payment or bad-debts. • The store's gross profit is 40% of its sales revenue. • For the next several months, the store wants to maintain an ending merchandise inventory equal to $12,000 plus 10% 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 $35,400. Expected monthly operating expenses and details about payments include the following: • Wages of store workers should be $7,100 per month and are paid on the last day of each month. • Utilities expense is expected to be $1,300 per month in September, October, and November Utilities expense is expected to be $1,400 per month during the colder months of December, January, and February. All utility bills are paid the month after incurred. Property tax is $27,600 per year and is paid semiannually each December and June. Property and liability insurance is $16,800 per year and is paid semiannually each January and July. • Depreciation expense is $168,000 per year; the straight-line method used. Print Done

Discount Plus Store is a local discount store with the following​ information:

Answer 1

1.Sales Budget
	October	Nov.	Dec.	Total(Nov.+Dec.)	Jan.
Sales budgeted	390000	429000	536250	965250	390000
Cash collections budget
1.Cash sales(20%)	78000	85800	107250	193050
Credit/debit card sales	312000	343200	429000	772200
2.Collection of the above(less 1%)		339768	424710	764478
Total sales cash collections for the mth.(1+2)		425568	531960	957528
2.Cost of Goods sold Budget
COGS(Sales $ *(1-40%))	234000	257400	321750	579150	234000
Inventory Budget
Ending Inventory(12000+Next COGS*10%)	37740	44175	35400	35400
Purchases budget
COGS(Sales $ *(1-40%))	234000	257400	321750	579150	234000
Ending Inventory(12000+Next COGS*10%)	37740	44175	35400	35400
Total needed	271740	301575	357150	614550
Less: Beg. Inv.	35400	37740	44175	37740
Purchases budgeted	236340	263835	312975	576810
Cash payment for purchases
Pmt.for purchase of merchandise		236340	263835	500175
3.Cash paid for Operating expenses
Wages		7100	7100	14200
Utilities expenses(paid next mth.)		1300	1300	2600
Property tax			27600	27600
Total cash opg. Exp.		8400	36000	44400
Total operating expenses budget
Wages		7100	7100	14200
Utilities expenses		1300	1400	2700
Creditcard/debit card fees		3432	4290	7722
Depn.		14000	14000	28000
Property tax (27600/12)		2300	2300	4600
Property & Liab.Ins.(16800/12)		1400	1400	2800
Total opg. Exp. Budgeted for the mth.		29532	30490	60022
Cash payments budget
Pmt.for purchase of merchandise		236340	263835	500175
Total cash opg. Exp.		8400	36000	44400
Total cash pmts. Budget		244740	299835	544575
Combined Cash Budget
Beg.bal.			180828
Total sales cash collections for the mth.(1+2)		425568	531960	957528
Total cash available		425568	712788	957528
Total cash pmts. Budgeted		244740	299835	544575
Surplus		180828	412953	412953
Budgeted Income statement
For Nov. & Dec
Sales		965250
Less: COGS		579150
Gross profit		386100
Total opg. Exp. Budgeted		60022
Opg. Income		326078