The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods:
Current assets as of March 31:
Building and equipment, net
a. The gross margin is 25% of sales.
b. Actual and budgeted sales data:
c. Sales are 60% for cash and 40% on credit. Credit sales are collected in the month following sale. The account
d. Each month’s ending inventory should equal 80% of the following month’s budgeted cost of goods sold.
e. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid for in t
f. Monthly expenses are as follows: commissions, 12% of sales; rent, $2,400 per month; other expenses (exclud
g. Equipment costing $1,600 will be purchased for cash in April.
h. Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. T
Using the data above: