The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: C. d. Current assets as of December 31: Cash Accounts receivable Inventory.. a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) b. Actual and budgeted sales data are as follows: e. Buildings and equipment, net. Accounts payable Capital stock. Retained earnings. December (actual). January. February $6,000 $36,000 $9,800 $110,885 $32,550 $100,000. $30,135 March April $60,000 $70,000 $80,000 $85,000 $55,000 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. h. f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud- ing depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter. g. Equipment will be acquired for cash: $3,000 in January and $8,000 in February. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter.
The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: C. d. Current assets as of December 31: Cash Accounts receivable Inventory.. a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) b. Actual and budgeted sales data are as follows: e. Buildings and equipment, net. Accounts payable Capital stock. Retained earnings. December (actual). January. February $6,000 $36,000 $9,800 $110,885 $32,550 $100,000. $30,135 March April $60,000 $70,000 $80,000 $85,000 $55,000 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three-quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory. h. f. Monthly expenses are as follows: commissions, $12,000; rent, $1,800; other expenses (exclud- ing depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter. g. Equipment will be acquired for cash: $3,000 in January and $8,000 in February. Management would like to maintain a minimum cash balance of $5,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $50,000. The interest rate on these loans is 1% per month, and for simplicity, we will assume that inter- est is not compounded. The company would, as far as it is able, repay the loan plus accumu- lated interest at the end of the quarter.
Chapter7: Accounting Information Systems
Section: Chapter Questions
Problem 17MC: Sold goods for $650, credit terms net 30 days. Which journal would the company use to record this...
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why did you multiple required purchases by 1/4 & 3/4? I am confused on this as i dont see it in the instructions.
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