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Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales...

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Accounting

Bramble Corporation is a small wholesaler of gourmet foodproducts. Data regarding the store's operations follow:

Sales are budgeted at $230,000 for November, $210,000 forDecember, and $200,000 for January.

Collections are expected to be 40% in the month of sale and 60%in the month following the sale.

The cost of goods sold is 65% of sales.

The company would like maintain ending merchandise inventoriesequal to 55% of the next month's cost of goods sold. Payment formerchandise is made in the month following the purchase.

Other monthly expenses to be paid in cash are $22,900.

Monthly depreciation is $13,900.

Ignore taxes.

Balance Sheet
October 31
Assets
Cash$22,300
Accounts receivable72,300
Merchandise inventory82,225
Property, plant and equipment,net of $574,300 accumulated depreciation1,096,300
Total assets$1,273,125
Liabilities andStockholders' Equity
Accounts payable$256,300
Common stock822,300
Retained earnings194,525
Total liabilities andstockholders' equity$1,273,125

The difference between cash receipts and cash disbursements forDecember would be:

Multiple Choice

$56,750

$42,563

$29,225

$98,100

Answer & Explanation Solved by verified expert
4.4 Ratings (653 Votes)

November

December

January

sales

230000

210000

200000

cost of goods sold-65% of next month sale

130000

Cash collection:

40% in the month of sales

92000

84000

80000

60% in the month following sales

138000

total cash collection

222000

payment to supplier

142350

cash expense

22900

total cash disbursed

165250

difference between cash receipts and cash disbursement

56750

November

december

January

cogs -65% of sales

149500

136500

130000

ending inventory = 55% of next month sales

75075

71500

beginning inventory

82225

75075

Purchase = total inventory available-opening inventory

142350

132925

total inventory available during the year = ending inventory+ cost of goods sold

224575

208000

ending inventory

75075

71500

cost of goods sold

149500

136500

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