Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have bee assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 47,000 205,600 58,800 357,000 $ 87,225 500,000 81,175 $ 668,400 $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March $ 257,000 $ 392,000 $ 589,000 $ 303,000 $ 200,000 April C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $43,220 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. Puring February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have bee assembled to assist in preparing the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 47,000 205,600 58,800 357,000 $ 87,225 500,000 81,175 $ 668,400 $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December(actual) January February March $ 257,000 $ 392,000 $ 589,000 $ 303,000 $ 200,000 April C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $43,220 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month. h. Puring February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Requirea i
Requirea ZA
Requirea 2B
Required 3
Required 4
kequirea 5
Prepare a balance sheet as of March 31.
Hillyard Company
Balance Sheet
March 31
Assets
Current assets:
Total current assets
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Stockholders' equity:
0.
0.
Total liabilities and stockholders' equity
%24
%24

Transcribed Image Text:Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been
assembled to assist in preparing the master budget for the first quarter:
a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances:
Cash
Accounts receivable
Inventory
Buildings and equipment (net)
Accounts payable
Common stock
Retained earnings
$ 47,000
205,600
58,800
357,000
$87,225
500,000
81,175
$ 668,400 $ 668,400
b. Actual sales for December and budgeted sales for the next four months are as follows:
December(actual)
January
February
March
April
$ 257,000
$ 392,000
$ 589,000
$ 303,000
$ 200,000
C. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts
receivable at December 31 are a result of December credit sales.
d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising, $62,000 per month; shipping, 5%
of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be
$43,220 for the quarter.
f. Each month's ending inventory should equal 25% of the following month's cost of goods sold.
g. One-half of a month's inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased
for cash at a cost of $73,500.
i. During January, the company will declare and pay $45,000 in cash dividends.
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