ACT305 Module 6 - Cost of Production.xlsx

ACT305 Module 6 - Cost of Production.xlsx

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Hillyard Company, an office supplies specialty store, prepares its master budget o 1 As of December 31, (the end of the prior quarter), the company’s general ledger Cash $48,000 (debit) Accounts receivable $224,000 (debit) Inventory $60,000 (debit) Buildings and equipment, net $370,000 (debit) Accounts payable $93,000 (credit) Capital stock $500,000 (credit) Retained earnings $109,000 (credit) 2 Actual sales for December and budgeted sales for the next four months are as fo 3 Sales are 20% for cash and 80% on credit. All payments on credit sales are collec 4 The company’s gross margin is 40% of sales. (In other words, cost of goods sold i 5 Monthly expenses are budgeted as follows: salaries and wages, $27,000 per mon 6 Each month’s ending inventory should equal 25% of the following month’s cost o 7 One half of the month’s inventory purchases is paid for in the month of purchase 8 During February, the company will purchase a new copy machine for $1,700 cash 9 During January, the company will declare and pay $45,000 in cash dividends.
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