please show work! can\'t figure it out. thanks. Fusglove Conmpeny, a growing res

Question

please show work! can't figure it out. thanks.

Fusglove Conmpeny, a growing resailer, is peeparing its budget for the first half of the year assuming the following for Sales each einh: angary February 242.000S266 200 For buadget purposes, the following assunuptions are used: a The curryany's Gros Margin is 20% b, merchandise is purchased in the moth prior to the month of Sale. c. 75% of merchandise purchases are made on credit with the rest paid in Cm d Foorulal purchases, 30% ís pid in the moré ofprchase, 50% in the month folkrwinL rd therma ning 20% n the second month after parchase e. Half of Sales are made on Credit with the other 50% in cash each month. r Collections on credit sales are expected to be 60% in the month ofsale and the remainder in the following t Selling and administrative expenses of $15,000 per month inckude $2,500 of depreciation expense h. The i. Foxglove will be declaring a dividend of $10,000 in February and k. The budeoted halence in Retained Farnings os January 31 is $250,000 company incurs interest expense od S1,000 per month which it pays in Cash in March and June. paying to shareholders in March buderted cash disbarsements related to merchandise parchases for the month of March would be: A. $146,916 B. $249,128 C. $200,156 D. $195,888 E None of the above. 6 Fesglove's budgstod Reta A $365,500 B $278,000 budgeted Retained Eamings balance at the end of February woold be:

Explanation / Answer

15. Answer: Option C. $200,156

16. Answer: Option C. $268,000

January February March April Sales 200000 220000 242000 266200 Cost of goods sold (80%) 160000 176000 193600 212960 Purchases 176000 193600 212960 Credit purchases (75%) 132000 145200 159720

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