Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given belov The June 30th balance sheet follows: Cash P 25,000 Accounts payable 45,000 Accounts receivable 110,000 Capital stock 300,000 Inventory 54,000 Retained earnings 94,000 Building and equipment (net) 250,000 Actual sales for June and budgeted sales for July, August, and September are given below: June P137,500 July 360,000 August 400,000 September 320,000 Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchase are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are P43,000, and the monthly depreciation expenses are P7,000. Question 1: What is the balance of the accounts receivable at the end of July? P288,000 Question 2: What is the balance of the accounts payable at the end of July? P166,500 Question 3: What is the balance of the inventory account at the end of July? P60,000
Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given belov The June 30th balance sheet follows: Cash P 25,000 Accounts payable 45,000 Accounts receivable 110,000 Capital stock 300,000 Inventory 54,000 Retained earnings 94,000 Building and equipment (net) 250,000 Actual sales for June and budgeted sales for July, August, and September are given below: June P137,500 July 360,000 August 400,000 September 320,000 Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchase are paid for in the month of purchase and the others are purchased on account and paid in full the following month. The monthly cash operating expenses are P43,000, and the monthly depreciation expenses are P7,000. Question 1: What is the balance of the accounts receivable at the end of July? P288,000 Question 2: What is the balance of the accounts payable at the end of July? P166,500 Question 3: What is the balance of the inventory account at the end of July? P60,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below:
The June 30th balance sheet follows:
Cash
P 25,000
Accounts payable
45,000
Accounts receivable
110,000
Capital stock
300,000
Inventory
54,000
Retained earnings
94,000
Building and equipment (net)
250,000
Actual sales for June and budgeted sales for July, August, and September are given below:
June
P137,500
July
360,000
August
400,000
September
320,000
Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.
The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchases
are paid for in the month of purchase and the others are purchased on account and paid in full the following month.
The monthly cash operating expenses are P43,000, and the monthly depreciation expenses are P7,000.
Question 1: What is the balance of the accounts receivable at the end of July?
P288,000
Question 2: What is the balance of the accounts payable at the end of July?
P166,500
Question 3: What is the balance of the inventory account at the end of July?
P60,000
(INSTRUCTIONS: DO NOT PUT COMMA or PESO SIGN ON YOUR ANSWERS)
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