Hancock Company, a merchandising company, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the second quarter a. As of December 31 (the end of the prior quarter), the company's balance sheet showed the following account balances Cash Accounts receivable Inventory Buildings and equipment (net) Accounts payable Common stock Retained eamings $ 9,500 50,400 17,640 131,000 $ 43,000 111,000 54,540 $ 208,540 $ 208,540 b. Actual and budgeted sales are as follows: December(actual) January February March 84,000 $126,000 $165,000 $110,000 $140,000 ril c. Sales are 40% for cash and 60% on credit. All payments on credit sales are collected in the month d. The company's gross margin percentage is 30% of sales. (In other words, cost of goods sold is 70% of e. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold following the sale. The accounts receivable at December 31 are a result of December credit sales. sales.) f. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three- quarters is paid for in the following month. The accounts payable at December 31 are the result of December purchases of inventory