Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below:

Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget. Data for the July master budget are given below:

The June 30th balance sheet follows

Cash $ 25,000

Accounts payable $ 45,000

Accounts receivable 110,000

Capital stock 300,000

Inventory 54,000

Retained earnings 94,000

Building and equipment (net) 250,000

Actual sales for June and budgeted sales for July, August, and September are given below:

June $137,500

July 360,000

August 400,000

September 320,000

Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts.

The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.

The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.

1. What is the balance of the accounts receivable at the end of July?

a. $110,000

b. $288,000

c. $360,000

d. $398,000

2. What is the balance of the accounts payable at the end of July?

a. $55,500

b. $93,000

c. $120,000

d. $166,500

3. What is the balance of the inventory account at the end of July?

a. $54,000

b. $60,000

c. $124,000

d. $216,000

4 . What is the balance of the building and equipment (net) account at the end of July?

a. $243,000

b. $250,000

c. $257,000

d. $300,000

5. What is the balance of the cash account at the end of July?

a. $8,500

b. $15,500

c. $62,500

d. $114,000

6. What are the total assets at the end of July?

a. $439,000

b. $446,500

c. $515,500

d. $653,500

Step by Step Solution

3.43 Rating (156 Votes )

There are 3 Steps involved in it

Step: 1

1 Option B The balance of the accounts receivable at the end of July 80 of July Sales 80 360... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
6096eaf053783_27317.pdf

180 KBs PDF File

Word file Icon
6096eaf053783_27317.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Survey Of Accounting

Authors: Paul D. Kimmel, Jerry J. Weygandt

2nd Edition

1119594537, 978-1119594536

More Books

Students also viewed these Accounting questions