Demo for Chapter 7- Comprehensive_Master_Budget_Demo (2)

Demo for Chapter 7- Comprehensive_Master_Budget_Demo (2) -...

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Chapter 7 Comprehensive Master Budget Demo #1 Spektra Company, a home furnishings store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparation of the master budget for the first quarter: a. As of December 31 (the end of the prior quarter), the company's general ledger showed the following account balances: b. Debits Credits Cash $26,000 Accounts Receivable 50,000 Inventory 86,400 Property and Equipment (net) 80,000 Accounts Payable $102,000 Capital Stock 45,000 Retained Earnings 95,400 $242,400 $242,400 Actual sales for December and budgeted sales for the next four months are as follows: c. December (actual) $200,000 January $240,000 February $250,000 March $275,000 April $226,810 Sales are 75% for cash and 25% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales. d. The company's gross profit margin is 40% of sales.
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This note was uploaded on 08/31/2010 for the course AEM 3230 taught by Professor Little,j.e. during the Spring '08 term at Cornell University (Engineering School).

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Demo for Chapter 7- Comprehensive_Master_Budget_Demo (2) -...

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