Chapter 9: Exercise 8-1 The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods: Current assets as of December 31: Cash Accounts receivable Inventory S 6,000 36,000 9,800 110,885 Buildings and equipment, net Accounts payable Capital stock Retained earnings chase 100,000 30,135 Gross profit is 30% of sales. (In other words, cost of goods sold is 70% of sales) Actual and budgeted sales data: December (actual) S January February March April a. b. 80,000 85,000 55,000 Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales c. d. At the end of each month, inventory is to be on hand equal to 20% of the following e. One-quarter of a month's inventory purchases is paid for in the month of purchase; the f Monthly expenses are as followsf salaries and wages,)$12,000: fend S1,800; other month's budgeted cost of goods sold. a other three-quarters is paid for in the following month, The accounts payable at December 31 are the result of December purchases of inventor y. expenses (excluding depreciation) 8% orsaty Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter- Equipment will be acquired for cash: $3,000 in January and $8,000 in February. The company must maintain a minimum cash balance of $5,000. An open line of credit is available at a local bank. All borrowing is done at the beginning of a month, and all. repayments are made at th The annual interest rate is t12%/ Interest is paid only at the time of repayment of principal; figure interest on whole months (1/12, 2/12 and so forth). g. h. e end of a month; borrowing must be in multiples of $1,000