Reference no: EM132596468

Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master budget.

Data for the July master budget are given below:

The June 30th balance sheet follows:

Cash $ 25,000                               Accounts payable $ 45,000

Accounts receivable 110,000           Capital stock 300,000

Inventory 54,000                              Retained earnings 94,000

Building and equipment (net) 250,000

Actual sales for June and budgeted sales for July, August, and September are given below:

June $137,500

July 360,000

August 400,000

September 320,000

Sales are 20 percent for cash and 80 percent on credit. All credit sales are collected in the month following the sale. There are no bad debts. The gross margin percentage is 40 percent of sales. The desired ending inventory is equal to 25 percent of the following month's sales. One fourth of the purchases are paid for in the month of purchase and the others are purchased on account and paid in full the following month.

The monthly cash operating expenses are $43,000, and the monthly depreciation expenses are $7,000.

Question 1: What is the balance of the accounts receivable at the end of July?

a. $110,000 b. $288,000

c. $360,000 d. $398,000

Question 2: What is the balance of the accounts payable at the end of July?

a. $55,500 b. $93,000

c. $120,000 d. $166,500

Question 3: What is the balance of the inventory account at the end of July?

a. $54,000 b. $60,000

c. $124,000 d. $216,000

Question 4: What is the balance of the building and equipment (net) account at the end of July?

a. $243,000 b. $250,000

c. $257,000 d. $300,000

Question 5: What is the balance of the retained earnings account at the end of July?

a. $94,000 b. $188,000

c. $360,000 d. $398,000

Question 6: What is the balance of the cash account at the end of July?

a. $8,500 b. $15,500

c. $62,500 d. $114,000

Question 7: What are the total assets at the end of July?

a. $439,000 b. $446,500

c. $515,500 d. $653,500