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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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