The capital expenditures budget shows that Valley must purchase $50,000 of equipment on January 1 to establish the new center. Valley will pay for the equipment on January 31. The equipment is expected to have a 8-year useful life and a $2,000 salvage value and will depreciate on a straight-line basis. Make sure to calculate depreciation ON A MONTHLY BASIS. Prepare a selling and administrative expense budget.

To prepare the selling and administrative expense budget, we need to consider the relevant expenses that Valley will incur in running the new center. These expenses generally include salaries, utilities, rent, office supplies, and any other costs associated with the administrative and selling functions.

1. Salary Expenses: Determine the monthly salary expenses for the employees involved in selling and administrative functions. This can be based on the number of employees and their respective salaries. For example, if there are three employees earning $4,000, $3,500, and $3,200 per month respectively, the total monthly salary expense would be $10,700.

2. Utility Expenses: Estimate the monthly utility expenses for the new center. This can be based on historical data if available or an estimate provided by the utility providers. For example, if the monthly utility expenses are estimated to be $800, include this amount in the budget.

3. Rent Expense: If Valley is renting the space for the new center, determine the monthly rent expense. This can be based on the lease agreement. For instance, if the monthly rent is $3,500, include this figure in the budget.

4. Office Supplies: Estimate the monthly expenses for office supplies required by the selling and administrative functions. This can be based on previous expenditure or anticipated needs. For example, if the estimated monthly office supplies expense is $500, include this amount in the budget.

5. Other Expenses: Consider any other relevant expenses that Valley might incur for the new center. These could include advertising costs, travel expenses, or any additional expenses specific to Valley's operations.

Once all these expense items have been determined, you can summarize them in a selling and administrative expense budget. Here's an example:

Selling and Administrative Expense Budget
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Salary expenses: $10,700
Utility expenses: $ 800
Rent expenses: $3,500
Office supplies: $ 500
Other expenses: $ XXX (based on further analysis)

Total expenses: $XX,XXX

Please note that the "Other expenses" line item will depend on the specific circumstances and needs of Valley and should be determined based on further analysis or specific information provided.