Posted: July 12th, 2016
The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods:
Current assets as of December 31:
Cash $ 6,000
Accounts receivable $36,000
Buildings and equipment, net $110,885
Accounts payable $32,550
Capital stock $100,000
Retained earnings $30,135
a. The gross margin is 30% of sales. (In other words, cost of goods sold is 70% of sales.)
b. Actual and budgeted sales data are as follows:
December (actual) $60,000
c. Sales are 40% for cash and 60% on credit. Credit sales are collected in the month following sale. The accounts receivable at December 31 are the result of December credit sales.
d. Each month’s ending inventory should equal 20% of the following month’s budgeted cost of goods sold.
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