Question

The following data relate to the operations of Gaudreau Company, which distributes consumer goods: Current assets as of December 31 Cas.. Accounts receivable.. Inventory. $6,000 $36,000 $9,800 Buildings and equipment, net ..$110,885 Accounts payable Common shares.. Retained earnings $32,550 $100,000 $30,135 a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.) b. Actual and budgeted sales data are as follows: December (actual) .. January. February.. March.... April. $60,000 $70,000 $80,000 $85,000 $55,000 C. 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. Each month's ending inventory should equal 20% of the following month's budgeted cost of goods sold d e. 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

Answer 1

1）		January	February	March	Quarter
	Cash sales	$    28,000	$    32,000	$   34,000	$      94,000
	Credit sales	$    36,000	$    42,000	$   48,000	$   126,000
	Total collections	$    64,000	$    74,000	$   82,000	$   220,000
2)		January	February	March	Quarter
	Budgeted cost of goods sold	$    49,000	$    56,000	$   59,500	$   164,500
	Add desired ending inventory	$    11,200	$    11,900	$      7,700	$        7,700
	Total needs	$    60,200	$    67,900	$   67,200	$   172,200
	Less beginning inventory	$      9,800	$    11,200	$   11,900	$        9,800
	Required purchases	$    50,400	$    56,700	$   55,300	$   162,400
	55000*70%*20%=7700
3）		January	February	March	Quarter
	December purchases	$    32,550			$      32,550
	January purchases	$    12,600	$    37,800		$      50,400
	February purchases		$    14,175	$   42,525	$      56,700
	March purchases			$   13,825	$      13,825
	Total disbursements	$    45,150	$    51,975	$   56,350	$   153,475
4)		January	February	March	Quarter
	Commissions	$    12,000	$    12,000	$   12,000	$      36,000
	Rent	$      1,800	$      1,800	$      1,800	$        5,400
	Other expenses	$      5,600	$      6,400	$      6,800	$      18,800
	Total disbursements	$    19,400	$    20,200	$   20,600	$      60,200
5)		January	February	March	Quarter
	Cash balance, beginning	$      6,000	$      6,450	$      6,275	$        6,000
	Add cash collections	$    64,000	$    74,000	$   82,000	$   220,000
	Total cash available	$    70,000	$    80,450	$   88,275	$   226,000
	Less cash disbursements:
	For inventory	$    45,150	$    51,975	$   56,350	$   153,475
	For operating expenses	$    19,400	$    20,200	$   20,600	$      60,200
	For equipment	$      3,000	8000	$             -	$      11,000
	Total cash disbursements	$    67,550	$    80,175	$   76,950	$   224,675
	Excess (deficiency) of cash	$      2,450	$          275	$   11,325	$        1,325
	Financing:
	Borrowings	$      4,000	$      6,000	$             -	$      10,000
	Repayments	$             -		$   (5,000)	$      (5,000)
	Interest	$             -		$       (240)	$         (240)
	Total financing	$      4,000	$      6,000	$   (5,240)	$        4,760
	Cash balance, ending	$      6,450	$      6,275	$      6,085	$        6,085
6)	Sales		$ 235,000
	Cost of goods sold:
	Beginning inventory	$      9,800
	Purchases	$ 162,400
	Goods available for sale	$ 172,200
	Ending inventory	$      7,700	$ 164,500
	Gross margin		$    70,500
	Selling and administrative expenses:
	Commisions	$    36,000
	Rent	$      5,400
	Depreciation	$      2,400
	Other expenses	$    18,800	$    62,600
	Net operating income		$      7,900
	Interest Expense		$          240
	Net income		$      7,660
7)	Assets
	Current assets:
	Cash	$      6,085
	Account receivable	$    51,000	(85000*60%)
	Inventory	$      7,700
	Total current assets	$    64,785
	Fixed assets	$ 119,485
	Total assets	$ 184,270
	Liabilities and equity
	Account payable	$    41,475
	Bank loan payable	$      5,000	$    46,475
	Equity:
	Common shares	$ 100,000
	Retained earning	$    37,795	$ 137,795
	Total liabilities and equity	$ 184,270