2) Saved 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: Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained earnings $ 41,000 200,800 57,900 351,000 $ 85,425 500,000 65,275 $ 650,700 $ 650,700 b. Actual sales for December and budgeted sales for the next four months are as follows: December (actual). January February March April $ 251,000 $ 386,000 $ 583,000 $ 297,000 $ 194,000 Help 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, $16,000 per month: advertising, $56,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,260 for the quarter. f. Each month's ending inventory should equal 25% of the following month's cost of goods sold. < Prev 5 of 5 Next >