Macheski Company, an importer and retailer of Polish pottery and kitchenware, prepares a monthly master...
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Accounting
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 cost of 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. What is the balance of the inventory account at the end of July?
$60,000
$124,000
$216,000
$54,000
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