In preparing the schedules of expenses, refer to the previous assignment for the analysis of the Sales General Expenses and General Expense accounts.
Analyze the Interest and Bank Expense account into expense and income, and show these items separately in the statements.
XXV
Adjust and close the ledger through the general journal in accordance with the data given in [Assignment XXIII].
XXVI
1. The sales of the Radcliffe Company last year January to June, amounted to $752,465. It is estimated that the price level for the current year will be 10% lower than a year ago. Due to plans for increased publicity and sales effort, it is expected that the volume of sales for the corresponding period this year will be 15% larger than last year’s. The average rate of turnover is 3½ and the mark-on is 35%.
What will be the average amount of capital required to finance the merchandise stock?
2. In establishing a buying quota for a three-month period, the Gotham Novelty Company has available from its records the following data: present inventory at retail $79,800; sales corresponding period last year $316,000; estimated sales volume this year same as last but 15% less in value. It is thought that the rate of turnover can be increased. It is therefore decided to reduce the stock carried so that at the close of the period there will be on hand a stock 20% less in volume.
Assuming that the price level is 15% less at the end of the period and that the mark-on is 40%, determine the company’s buying quota for the period.
3. The sales representative of the Natty Uniform Company is making his regular call on the Salem Dry Goods Co., whose buyer has just secured the following data from the accounting department: