SB Carner Lumber sells lumber and general building
Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:

• Sales are budgeted at $380,000 for November, $370,000 for December, and $350,000 for January.
• Collections are expected to be 84% in the month of sale, 15% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 72% of sales.
• The company purchases 29% of its merchandise in the month prior to the month of sale and 71% in the month of sale. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $23,100.
• Monthly depreciation is $15,900.
• Ignore taxes.

Statement of Financial Position October 31
Assets
Cash $20,000
Accounts receivable (net of allowance for uncollectible accounts) 84,400
Inventory 79,344
Property, plant and equipment (net of $500,000 accumulated depreciation) 984,000
Total assets $1,167,744

Liabilities and Stockholders Equity
Accounts payable $273,600
Common stock 784,000
Retained earnings 110,144
Total liabilities and stockholders’ equity $1,167,744

Rev: 02-17-2011
References




What is the cash balance at the end of December?
The cash balance at the end of December would be:


$200,088

$102,600

$20,000

$180,088

What is retained earnings at the end of December?
Retained earnings at the end of December would be:


$429,344

$234,644

$167,144

$110,144


I am lost with what to do after preparing the sales budget. COGS is throwing me off, how do I move on through out the master budget