October Sales are projected to be $300,000 Sales are projected to increase by 10% in November and another 20% in December and then return to the October level in January 25% of the sales are made in cash, while the remaining 75% are paid by credit or debit cards. The credit card companies and banks charge 2% transaction fee and deposit the net amount (sale price less the transaction fee) in the stores bank account daily. The store does not accept checks. Because of the payment mechanisms there is no risk of nonpayment or bad debts. The store gross profit is 25% of its sales revenue. For the next several months the store wants to maintain an ending merchandise inventory equal to $5,000+20% of the next months cost of good 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 50,000. Expected monthly operating expenses and details below about payments include the following: o Wages of store workers should be $9,000 per month and are paid on the last day of each month. o Utilities expense is expected to be $1200 per month in September, October, and November. o Utilities expense is expected to be $2000 per month during the colder months of December January and February o All utility bills are paid per month after incurred. o Property tax is $24000 per year and is paid semiannually each December and June o Property and liability insurance is $12000 per year and is paid semiannually each January and July o Depreciation Expense is $144000 per year and is paid semiannually each January and July. o Depreciation expense is $144000 per year, the straight-line method is used o Transaction fees as stated earlier are 2% of credit and debit cards. Cash dividends of $225000 are to be paid in December Assume the cash balance on October 31 is 10000. The company wants to maintain a cash balance of at least 10000 at the end of the month. The company has arranged a line of credit with a local bank at a 5% interest rate. There is no outstanding debt as of October 31st. Requirements: Prepare the following budgets for October, November and December: Sales Budget,Cost of Goods sold inventory and purchases budget,Operating expense budget, Budget income statement, Cash Collections budget, Cash payments budget, Combined cash budget