**Answer:**

1. The budgeted cash payment for January selling and administrative expenses is $82,500.

2. The amount of utilities payable is $10,000.

3. The amount of depreciation expense the store will report on the income statement for year 1 is $60,000

**Explanation:**

**1. Determine the amount of budgeted cash payments for January selling and administrative expenses.**

Budgeted cash payment = Sales commissions + Rent + Miscellaneous

= $50,000 + $30,000 + $2,500

Budgeted cash payment = $82,500.

Therefore, the budgeted cash payment for January selling and administrative expenses is $82,500.

**2. Determine the amount of utilities payable the store will report on the January 31 pro forma balance sheet.**

Since utilities are paid in the month after they are incurred, the amount of utilities payable is $10,000.

**3. Determine the amount of depreciation expense the store will report on the income statement for year 1, assuming that monthly depreciation remains the same for the entire year.**

Depreciation expenses for year 1 = $5,000 × 12 = $60,000.

Therefore, the amount of depreciation expense the store will report on the income statement for year 1 is $60,000.

**Note that** depreciation is not a cash expenses but just a recognition of the wear and tear of the asset. That is why it does not fall under any cash category above but to be reported in the income statement.