Fountain Office Supply's March 31, 2018, balance sheet follows: Fountain Office Supply Balance Sheet March 31, 2018 Assets Current Assets: Cash $34,000 Accounts Receivable 22,000 Merchandise Inventory 21,500 Prepaid Insurance 2,500 Total Current Assets $80,000 Property, Plant, and Equipment: Equipment and Fixtures 55,000 Less: Accumulated Depreciation (30,000) 25,000 Total Assets $105,000 Liabilities Current Liabilities: Accounts Payable $15,000 Salaries and Commissions Payable 6,450 Total Liabilities $21,450 Stockholders' Equity Common Stock, no par 14,000 Retained Earnings 69,550 Total Stockholders' Equity 83,550 Total Liabilities and Stockholders' Equity $105,000 The budget committee of Fountain Office Supply has assembled the following data: a. Sales in April are expected to be $100,000. Fountainforecasts that monthly sales will increase 2% over Aprilsales in May. June's sales will increase by 4% over April sales. July sales will increase 20% over April sales. b. Fountain maintains inventory of $9,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue. c. Monthly salaries amount to $8,000.Sales commissions equal 5% of sales for that month. d. Other monthly expenses are as follows: Rent: $2,600 Depreciation:$800 Insurance:$500 Income tax:$1,700 Prepare Fountain's sales budget for April and May 2018. Round all amounts to the nearest dollar.

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

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Fountain Office Supply's March 31, 2018, balance sheet follows:

Fountain Office Supply
Balance Sheet
March 31, 2018
Assets
Current Assets:
Cash	$34,000
Accounts Receivable	22,000
Merchandise Inventory	21,500
Prepaid Insurance	2,500
Total Current Assets	$80,000
Property, Plant, and Equipment:
Equipment and Fixtures	55,000
Less: Accumulated Depreciation	(30,000)	25,000
Total Assets	$105,000

Liabilities
Current Liabilities:
Accounts Payable	$15,000
Salaries and Commissions Payable	6,450
Total Liabilities			$21,450
Stockholders' Equity
Common Stock, no par	14,000
Retained Earnings		69,550
Total Stockholders' Equity		83,550
Total Liabilities and Stockholders' Equity		$105,000

The budget committee of Fountain Office Supply has assembled the following data:

a.	Sales in April are expected to be $100,000. Fountain forecasts that monthly sales will increase 2% over April sales in May. June's sales will increase by 4% over April sales. July sales will increase 20% over April sales.
b.	Fountain maintains inventory of $9,000 plus 25% of the cost of goods sold budgeted for the following month. Cost of goods sold equal 50% of sales revenue.
c.	Monthly salaries amount to $8,000.Sales commissions equal 5% of sales for that month.
d.	Other monthly expenses are as follows: Rent: $2,600 Depreciation:$800 Insurance:$500 Income tax:$1,700

Prepare Fountain's sales budget for April and May 2018. Round all amounts to the nearest dollar.

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