J&P Corp., has been accumulating operating data in order to prepare an annual profit plan. Details regarding J&P Corp.’s sales for the first 6 months of the coming year are as follows: Forecasted sales January P600,000; February P650,000; March P700,000; April P625,000; May P720,000; June P800,000 Types of sales: Cash sales 20% Credit sales 80% Collection Pattern for Credit Sales :Month of sale 30%; One month following sale 40%; Second month following sales 25% J&P’s cost of goods sold averages 40% of the sales value. Roque’s objective is to maintain a target inventory equal to 30% of the next month’s sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other tan cost of goods sold) for J&P are 10% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July and October. Property taxes are paid twice a year in April and October. Advertising P720,000 Depreciation P420,000 Insurance P180,000 Property Taxes P240,000 Salaries P1,080,000 The purchase of merchandise that J&P Corp. will need to make during February will be

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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J&P Corp., has been accumulating operating data in order to prepare an annual profit plan. Details regarding J&P Corp.’s sales for the first 6 months of the coming year are as follows: Forecasted sales

January P600,000; February P650,000; March P700,000; April P625,000; May P720,000; June P800,000

Types of sales: Cash sales 20% Credit sales 80%

Collection Pattern for Credit Sales :Month of sale 30%; One month following sale 40%; Second month following sales 25%

J&P’s cost of goods sold averages 40% of the sales value. Roque’s objective is to maintain a target inventory equal to 30% of the next month’s sales in units. Purchases of merchandise for resale are paid for in the month following the sale. The variable operating expenses (other tan cost of goods sold) for J&P are 10% of sales and are paid for in the month following the sale. The annual fixed operating expenses are presented below. All of these are incurred uniformly throughout the year and paid monthly except for insurance and property taxes. Insurance is paid quarterly in January, April, July and October. Property taxes are paid twice a year in April and October.

Advertising P720,000

Depreciation P420,000

Insurance P180,000

Property Taxes P240,000

Salaries P1,080,000

The purchase of merchandise that J&P Corp. will need to make during February will be

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