ces The following data reláte to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash 8,000 Accounts receivable 20,000 Inventory 36,000 Buildings and equipment, net 120,000 Accounts payable 21,750 Common shares 150,000 Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) April May June July $50,000 $60,000 $72,000 $90,000 $48,000 12,250 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other one-half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500; other expenses (excluding depreciation), 6% of sales. Accume that there ovnences are naid monthly Donrociation in Cann nor month and includes donrociation on now at
ces The following data reláte to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash 8,000 Accounts receivable 20,000 Inventory 36,000 Buildings and equipment, net 120,000 Accounts payable 21,750 Common shares 150,000 Retained earnings a. The gross margin is 25% of sales. b. Actual and budgeted sales data are as follows: March (actual) April May June July $50,000 $60,000 $72,000 $90,000 $48,000 12,250 c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March 31 are the result of March credit sales. d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold. e. One-half of a month's inventory purchases is paid for in the month of purchase; the other one-half is paid for in the following month. The accounts payable at March 31 are the result of March purchases of inventory. f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500; other expenses (excluding depreciation), 6% of sales. Accume that there ovnences are naid monthly Donrociation in Cann nor month and includes donrociation on now at
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ces
The following data reláte to the operations of Shilow Company, a wholesale distributor of consumer goods:
Current assets as of March 31:
Cash
8,000
Accounts receivable
20,000
Inventory
36,000
Buildings and equipment, net
120,000
Accounts payable
21,750
Common shares
150,000
Retained earnings
a. The gross margin is 25% of sales.
b. Actual and budgeted sales data are as follows:
March (actual)
April
May
June
July
$50,000
$60,000
$72,000
$90,000
$48,000
12,250
c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The accounts receivable at March
31 are the result of March credit sales.
d. Each month's ending inventory should equal 80% of the following month's budgeted cost of goods sold.
e. One-half of a month's inventory purchases is paid for in the month of purchase; the other one-half is paid for in the following month.
The accounts payable at March 31 are the result of March purchases of inventory.
f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500; other expenses (excluding depreciation), 6% of sales.
Accume that there ovnences are naid monthly Donrociation in Cann nor month and includes donrociation on now at
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