Weis & Company
Balance Sheet
As of December 31, 2019
ASSETS			LIABILITIES & STOCKHOLDERS EQUITY
Current Assets			Current Liabilities
Cash	$ 15,800		Accounts Payable	$ 21,952
Accounts Receivable	$ 62,400		Commissions Payable	$ 7,800
Prepaid Insurance	$ - 0 -		Dividends Payable	$ -0-
Inventory	$ 11,200		Income Taxes Payable	$ 1,600
Total Current Assets	$ 89,400		Total Current Liabilities	$ 31,352
Property Plant & Equipment			Long term debt	$ 75,000
Land	$ 40,000		Stockholders' Equity
Equipment	$ 80,000		Common Stock	$ 63,048
Accumulated Depreciation	$(20,000)		Retained Earnings	$ 20,000
Total PP &E	$100,000		Total Stockholders Equity	$ 83,048
TOTAL ASSETS	$189,400		TOTAL LIABILITIES & STOCKHOLDERS EQUITY	$ 189,400

1. Expected sales in January 2020 are $80,000 and expected sales in February 2020 are $70,000. All sales are credit sales.

2. The company collects 20% of sales in the month of the sale and 80% in the month after the sale.

3. The cost of sales are equal to 70% of the sales price.

4. The company desires an ending inventory equal to 20% of the next months cost of sales.

5. All purchases of inventory are on account.

6. The company pays for 60% of its purchases in the month of the purchase and 40% in the month after the purchase.

7. On January 1, 2020, the company purchased a 1-year insurance policy to cover all of 2020 for $7,200.

8. The company pays a 10% sales commission to its sales staff that is paid in the month after it is earned. Other Selling and Administrative Expenses, paid in the month they are incurred, include Advertising $4,000 per month, Utilities $1,000 per month, Salaries $7,000 per month. Depreciation is $2,000 per month.

9. The company pays interest on its long-term debt each month. Interest is equal to 1% of the balance of long-term debt at the beginning of the month.

10. Income taxes are equal to 25% and taxes are paid the month after they are incurred. The company declared and paid a $1,000 dividend in January.

11. The company requires a minimum cash balance of $15,000. If it must borrow funds, it must borrow in increments of $1,000. Any cash available in excess of the minimum cash balance will be used to pay down long-term debt. The company will either borrow funds or repay funds in a given month, but never both.

What are TOTAL INVENTORY PURCHASES for January?

• A. $54,600
• B. $54,712
• C. $32,760
• D. $60,800
• E. None of the above

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Question 4 of 475 Points

What are TOTAL CASH PAYMENTS for SELLING & ADMINISTRATIVE EXPENSES for January?

• A. $29,000
• B. $27,200
• C. $27,000
• D. $29,200
• E. None of the above

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Question 5 of 475 Points

What is the CONTRIBUTION MARGIN in January?

• A. $16,000
• B. $72,000
• C. $16,200
• D. $24,000
• E. None of the above

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Question 6 of 475 Points

What is the balance of ACCOUNTS RECEIVABLE as of January 31, 2020?

• A. $64,000
• B. $62,400
• C. $56,000
• D. $16,000
• E. None of the above

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Question 7 of 475 Points

What is balance of RETAINED EARNINGS as of January 31, 2020?

• A. $19,488
• B. $20,488
• C. $19,650
• D. $20,650
• E. None of the above

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Question 8 of 475 Points

What is the balance of ACCOUNTS PAYABLE as of January 31, 2020?

• A. $21,952
• B. $24,320
• C. $32,760
• D. $21,840
• E. None of the above

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