The following data relate to the operations of S Company, Current Assets as of March...
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Accounting
The following data relate to the operations of S Company, Current Assets as of March 31: Cash $8,000 Accounts Receivable $20,000 Inventory $36,000 Accounts Payable $21,750 a. The cost of goods sold is 75% of sales.
b. Actual and budgeted sales data: March (actual) $50,000 April $60,000 May $72,000 June $90,000 c. 60% of budgeted sales is cash and 40% on credit. Credit sales are collected in the month following the sale. The accounts receivable on 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 results on March purchases of inventory.
f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,500 per month; other expenses (excluding depreciation), 6% of sales. Assume that these expenses are paid monthly. Depreciation is $900 per month (includes depreciation of new assets).
g. Equipment costing $1,500 will be purchased for cash in April.
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