Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. carver lumber sells lumber and general building su

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town...

60.1K

Verified Solution

Question

Accounting

Carver 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 $350,000 for November, $320,000 for December, and $300,000 for January. Collections are expected to be 90% in the month of sale and 10% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% of the following 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 $24,700. Monthly depreciation is $16,000. Ignore taxes.

Balance Sheet October 31
Assets
Cash $ 19,000
Accounts receivable 77,000
Inventory 157,500
Property, plant and equipment, net of $502,000 accumulated depreciation 1,002,000
Total assets $ 1,255,500
Liabilities and Stockholders' Equity
Accounts payable $ 272,000
Common stock 780,000
Retained earnings 203,500
Total liabilities and stockholders' equity $ 1,255,500

Accounts payable at the end of December would be:

$135,000

$96,000

$240,000

$231,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students