Sales Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Gross margin Selling and administrative expenses: Commissions Rent Depreciation Other expenses Net operating income Interest expense Net income $ 227,000 38.400 158.850 197.250 19T 250 29.750 27.240 8.300 13.620 47,160 (17,410) 210 (17,620) The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $19,299 $ 38,400 $124,803 $22,898 $ 150,000 $16,990 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 48,000 $ 64,000 $ 69,000 $94.000 $ 45,000 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 a 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 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, $2,100 per month; other expenses (excluding depreciation). 6% of sales. Assume that these expenses are paid monthly. Depreciation is $936 per month (includes depreciation on new assets). g. Equipment costing $1,300 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 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
Sales Shilow Company Income Statement For the Quarter Ended June 30 Cost of goods sold: Beginning inventory Purchases Goods available for sale Ending inventory Gross margin Selling and administrative expenses: Commissions Rent Depreciation Other expenses Net operating income Interest expense Net income $ 227,000 38.400 158.850 197.250 19T 250 29.750 27.240 8.300 13.620 47,160 (17,410) 210 (17,620) The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31: Cash Accounts receivable Inventory Building and equipment, net Accounts payable Common stock Retained earnings $19,299 $ 38,400 $124,803 $22,898 $ 150,000 $16,990 a. The gross margin is 25% of sales. b. Actual and budgeted sales data: March (actual) April May June July $ 48,000 $ 64,000 $ 69,000 $94.000 $ 45,000 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 a 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 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, $2,100 per month; other expenses (excluding depreciation). 6% of sales. Assume that these expenses are paid monthly. Depreciation is $936 per month (includes depreciation on new assets). g. Equipment costing $1,300 will be purchased for cash in April. h. Management would like to maintain a minimum cash balance of at least $4,000 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What is the answer for depreciation?
Transcribed Image Text:Sales
Shilow Company
Income Statement
For the Quarter Ended June 30
Cost of goods sold:
Beginning inventory
Purchases
Goods available for sale
Ending inventory
Gross margin
Selling and administrative expenses:
Commissions
Rent
Depreciation
Other expenses
Net operating income
Interest expense
Net income
$ 227,000
38.400
158.850
197.250
19T 250
29.750
27.240
8.300
13.620
47,160
(17,410)
210
(17,620)
Transcribed Image Text:The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:
Current assets as of March 31:
Cash
Accounts receivable
Inventory
Building and equipment, net
Accounts payable
Common stock
Retained earnings
$19,299
$ 38,400
$124,803
$22,898
$ 150,000
$16,990
a. The gross margin is 25% of sales.
b. Actual and budgeted sales data:
March (actual)
April
May
June
July
$ 48,000
$ 64,000
$ 69,000
$94.000
$ 45,000
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 a 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 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, $2,100 per month; other expenses (excluding depreciation). 6% of
sales. Assume that these expenses are paid monthly. Depreciation is $936 per month (includes depreciation on new assets).
g. Equipment costing $1,300 will be purchased for cash in April.
h. Management would like to maintain a minimum cash balance of at least $4,000 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
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