Question

I'm good with A-G except thedepreciation expense on F is alluding me. I need some help with H,I and J please.

Haas Company is a retail company that specializes in sellingoutdoor camping equipment. The company is considering opening a newstore on October 1, 2015. The company president formed a planningcommittee to prepare a master budget for the first three months ofoperation. As budget coordinator, you have been assigned thefollowing tasks.

Required

a.& b.	October sales are estimated to be $250,000, of which 40 percentwill be cash and 60 percent will be credit. The company expectssales to increase at the rate of 8 percent per month. The companyexpects to collect 100 percent of the accounts receivable generatedby credit sales in the month following the sale. Prepare a salesbudget and a schedule of cash receipts.

c.& d.

The cost of goods sold is 60 percent of sales. The companydesires to maintain a minimum ending inventory equal to 10 percentof the next month’s cost of goods sold. However, ending inventoryof December is expected to be $12,000. The company pays 70 percentof accounts payable in the month of purchase and the remaining 30percent in the following month. Assume that all purchases are madeon account. Prepare an inventory purchases budget and a cashpayments budget for inventory purchases. (Round youranswers to the nearest whole dollar amount.)

e.& f.	Budgeted selling and administrative expenses per month follow.

Salary expense (fixed)	$	18,000
Sales commissions		5	percent ofSales
Supplies expense		2	percent ofSales
Utilities (fixed)	$	1,400
Depreciation on store fixtures (fixed)*	$	4,000
Rent(fixed)	$	4,800
Miscellaneous (fixed)	$	1,200

*	The capital expenditures budget indicates that Haas will spend$164,000 on October 1 for store fixtures, which are expected tohave a $20,000 salvage value and a three-year (36-month) usefullife.

Utilities and sales commissions are paid the month after theyare incurred; all other expenses are paid in the month in whichthey are incurred. Prepare a selling and administrative expensesbudget and a cash payments budget for selling and administrativeexpenses. (Round your answers to nearest whole dollaramount.)

g.

Haas borrows funds, in increments of $1,000, and repays them onthe last day of the month. Repayments may be made in any amountavailable. The company also pays its vendors on the last day of themonth. It pays interest of 1 percent per month in cash on the lastday of the month. To be prudent, the company desires to maintain a$12,000 cash cushion. Prepare a cash budget. (Anyrepayments/shortage which should be indicated with a minus sign.Round your answers to nearest whole dollar amount.)

h.	Prepare a pro forma income statement for the quarter.(Round your answers to nearest whole dollaramount.)

i.	Prepare a pro forma balance sheet at the end of the quarter.(Amounts to be deducted should be indicated by a minussign.)

j.	Prepare a pro forma statement of cash flows for the quarter.(Amounts to be deducted should be indicated by a minussign. Round your answers to nearest whole dollaramount.)