Question

Problem Solving Completing a Master Budget: The following data relate to the operations of Rebel Corporation, a wholesale distributor of consumer goods. Current assets as of December 31: Cash Accounts receivable Inventory Buildings and equipment Accounts payable Capital Stock Retained earnings 15,000 25,000 18,500 110.000 35.000 100,000 23,500 a. The gross margin is 40% of sales (so cost of goods sold is 60% of sales) b. Actual and budgeted sales data are as follows: Below table indicates sales for December month and sales for Jan, Feb and March months you have to take your own amounts. Months December January February March April Amounts (S) 50,000 60,000 72.000 86,400 103,680 c. Sales are 50% for cash and 50% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales d. Each month ending inventory should equal 30% of the following month's budgeted cost of goods sold. e. One-quarter of a month's inventory purchases is paid for in the month of purchase; the other three quarter is paid for in the following month. The accounts payable at December 31" are the result of December purchase of inventory. f. Monthly expenses are as follows: commission $10,000, rent $2,000, other expenses excluding depreciation 7% of sales. Assume all these expenses are paid monthly. Depreciation is $2,500 for the quarter and includes depreciation on new assets acquired during the quarter.