Budget planning : make sure to show all the steps and calculations

PROBLEM 7-7 Comprehensive Master Budget [LO2 - CC5, 7, 11, 12; LO3 - CC13, 14] Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly beais The following data have been assembled to assist in preparation of the master budget for the first quarter: 2. As of December 31 (the end of the prior quarter), the company's general ledger showed the following accocant balances: b. Actual sales for December and budgeted sales for the next four months are as follows: 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. c. Monthly expenses are budgeted as follows; salaries and wages, $27,000 per month; advertising, 570,000 per month; shipping, 5% of sales; depreciation, $14,000 per month; other expenses, 3% of sales. f. At the end of each month, inventory is to be on hand equal to 25% of the following month's sales nedb. stated at cost. 8. Oae-half of a month's inventory purchases are paid for in the month of purchase; the other half are pid for in the following month