Question

Completing a Master Budget [L02] The following data relate to the operations of Gaudreau Company, which distributes consumer goods Current assets as of December 31 Cash.... Accounts receivabe. Inventory Buildings and equipment, net Accounts payable Common shares... Retained earnings $6,000 $36,000 $9,800 $110,885 $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... $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. d. Each month's ending inventory should equal 20% of the following month's budgeted e. One-quarter of a mont's inventory purchases is paid for in the month of purchase t. Monthly expenses are as follows: commissions, $12,000, rent, $1,800, other cost of goods sold 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 expenses (excluding depreciation), 8% of sales. Assume that these expenses are paid monthly. Depreciation is $2,400 for the quarter and includes depreciation on new assets acquired during the quarter g Equipment will be acquired for cash $3,000 in January and $8,000 in February 2 English (Canada

Answer 1