Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations...
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Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,000. Monthly depreciation is $15,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings 263,000 Total liabilities and stockholders' equity $ 1,337,000 Expected cash collections in December are: a $68,000 b $256,000 c $320,000 d $324,000
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January.
Collections are expected to be 80% in the month of sale and 20% in the month following the sale.
The cost of goods sold is 75% of sales.
The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $24,000.
Monthly depreciation is $15,000.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash $ 20,000
Accounts receivable 70,000
Merchandise inventory 153,000
Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000
Total assets $ 1,337,000
Liabilities and Stockholders' Equity
Accounts payable $ 254,000
Common stock 820,000
Retained earnings 263,000
Total liabilities and stockholders' equity $ 1,337,000
Expected cash collections in December are:
a
$68,000
b
$256,000
c
$320,000
d
$324,000
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