Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter. a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: $ 47,000 205,600 58,800 357,000 Cash Accounts receivable Inventory Buildings and equipnent (net) Accounts payable Common stock $ 87,225 s00,000 81,175 $ 668,400 Retained earnings $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March $ 257,000 $ 392,000 $ 589,000 $ 303,000 $ 200,000 April c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising. S62,000 per month; shipping, 5 will he
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter. a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: $ 47,000 205,600 58,800 357,000 Cash Accounts receivable Inventory Buildings and equipnent (net) Accounts payable Common stock $ 87,225 s00,000 81,175 $ 668,400 Retained earnings $ 668,400 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual) January February March $ 257,000 $ 392,000 $ 589,000 $ 303,000 $ 200,000 April c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales) e. Monthly expenses are budgeted as follows: salaries and wages, $22,000 per month: advertising. S62,000 per month; shipping, 5 will he
Chapter3: Setting Up A New Company
Section: Chapter Questions
Problem 3.1C
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