a. As of Dec. 31 (the end of the prior quarter), the company\'sgeneral ledger sh

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a. As of Dec. 31 (the end of the prior quarter), the company'sgeneral ledger showed the following account balances: Debit Credit Cash 26000 Accounts Receivable 50000 Inventory 86400 Building and Equipment (net) 80000 Accounts Payable 102000 Capital Stock 45000 Retained Earnings 95400 242400 242400
b. Actual sales for December and budgeted sales for the next fourmonths are as follows: December (actual) 200000 January 240000 February 250000 March 275000 April 260000 c. Sales are 75% for cash and 25% on credit. All payments oncredit sales are collected in the month following sale. Theaccounts receivable at December 31 are a result of December creditsales. d. The company's gross margin is 40% of sales. (In otherwords, cost of goods sold is 60% of sales). e. Monthly expenses are budgeted as follows: salaries andwages, $14000 per month: advertising, $25000 per month; shipping,5% of slaes; other expense, 15% of sales. Depreciation will be$8000 for the quarter. f. Each month's ending inventory should equal 60% of thefollowing month's cost of goods sold. g. 30% of a month's inventory purchaes is paid for in themonth of purchase; the remainder is paid for in the followingmonth h. during Feb, the company will purchase land for $8000 cash.During March, land will be purchased for cahs at a cost of2000. i. During Jan, the company will declare and pay 30000 in cashdividends. j. Managment wants to maintain a minimum cash balace of 5000.The company has an agreement with a local bank that allows thecompany to borrow in increments of $1000 at the beginning of eachmonth, up to a total loan balance of $20000. The interest rate onthese loans is 1% per month. For simplicity, we will assume thatthe interest is not compounded. The company will, as far as it isable, repay the loan plus accumulated interest at the end of thequarter. Using the above data, complete the statement and schedules forthe first quarter. E) Cash budget: Jan Feb March Quarter Cash balance, beginning 26000 Add cash collections 230000 total cash available 256000 Less cash disbursements:    purchases of inventory 146280    selling and administrative expenses 87000    purchases of land 0    cash dividends 30000    total cash disbursements 263280 excess (deficiency) of cash (7280) Financing: etc. a. As of Dec. 31 (the end of the prior quarter), the company'sgeneral ledger showed the following account balances: Debit Credit Cash 26000 Accounts Receivable 50000 Inventory 86400 Building and Equipment (net) 80000 Accounts Payable 102000 Capital Stock 45000 Retained Earnings 95400 242400 242400 Debit Credit Cash 26000 Accounts Receivable 50000 Inventory 86400 Building and Equipment (net) 80000 Accounts Payable 102000 Capital Stock 45000 Retained Earnings 95400 242400 242400
b. Actual sales for December and budgeted sales for the next fourmonths are as follows: December (actual) 200000 January 240000 February 250000 March 275000 April 260000 c. Sales are 75% for cash and 25% on credit. All payments oncredit sales are collected in the month following sale. Theaccounts receivable at December 31 are a result of December creditsales. d. The company's gross margin is 40% of sales. (In otherwords, cost of goods sold is 60% of sales). e. Monthly expenses are budgeted as follows: salaries andwages, $14000 per month: advertising, $25000 per month; shipping,5% of slaes; other expense, 15% of sales. Depreciation will be$8000 for the quarter. f. Each month's ending inventory should equal 60% of thefollowing month's cost of goods sold. g. 30% of a month's inventory purchaes is paid for in themonth of purchase; the remainder is paid for in the followingmonth h. during Feb, the company will purchase land for $8000 cash.During March, land will be purchased for cahs at a cost of2000. i. During Jan, the company will declare and pay 30000 in cashdividends. j. Managment wants to maintain a minimum cash balace of 5000.The company has an agreement with a local bank that allows thecompany to borrow in increments of $1000 at the beginning of eachmonth, up to a total loan balance of $20000. The interest rate onthese loans is 1% per month. For simplicity, we will assume thatthe interest is not compounded. The company will, as far as it isable, repay the loan plus accumulated interest at the end of thequarter. Using the above data, complete the statement and schedules forthe first quarter. E) Cash budget: Jan Feb March Quarter Cash balance, beginning 26000 Add cash collections 230000 total cash available 256000 Less cash disbursements:    purchases of inventory 146280    selling and administrative expenses 87000    purchases of land 0    cash dividends 30000    total cash disbursements 263280 excess (deficiency) of cash (7280) Financing: etc. Debit Credit Cash 26000 Accounts Receivable 50000 Inventory 86400 Building and Equipment (net) 80000 Accounts Payable 102000 Capital Stock 45000 Retained Earnings 95400 242400 242400

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a. As of Dec. 31 (the end of the prior quarter), the company'sgeneral ledger sh

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