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Yvonne's Fashion Fair sells women shoes for S10 each. Actual and budgeted sales in units for nine months are as follows: January (actual) February (actual)
Yvonne's Fashion Fair sells women shoes for S10 each. Actual and budgeted sales in units for nine months are as follows: January (actual) February (actual) 26,000 March (actual)..40,000 August (budget) 50,000 30,000 28,000 65,000 September (budget).. 25,000 July (budget) The company should have sufficient inventory on hand at the end of each month to supply 40% ofthe shoes sold in the following month. Suppliers are paid $4 each for a pair of shoes. One half of a month's purchases are paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has fund however, that only 20% of a month's sales are collected in he month of sale. An additional 70% 1s collected in the following month and te remaining 10% s collected in he second month following sale. Monthly operating expenses for the company are given below: Variable Sales commission... Fixed $200,000 18,000 106,000 7,000 3,000 Advertising Rent Insurance is paid on an annual basis, in November of each year. The company plans to purchase $16,000 in new equipment during May 2018 and $40,000 in land during June 2018: both purchases will be for cash. The company declares dividends of $15,000 each quarter, payable in the first month ofthe following quarter A listing of the company's ledger accounts as of March 31, 2018, is given below: Assets Cash. Accounts Receivable (S$26,000 from February Sales; S320,000 from March sales) Inventory Prepaid Insurance Property and equipment (net) Total 346.000 104,000 21,000 1.495.000 Liabilities and Stockholders' Equity
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