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Zach's Retail Store started operations on June 1. For purposes of budget preparation, assume the...

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Accounting

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Zach's Retail Store started operations on June 1. For purposes of budget preparation, assume the following . Expected sales for the first four months are: June........ $10,000 July.................... $16,000 August............... $24,000 September......... $25,000 The company's cost of goods sold is 60% of sales. The company desires that the merchandise inventory on hand at the end of each month be equal to 50% of the next month's cost of goods sold. All purchases of merchandise inventory must be paid in the month of purchase. 60% of all sales are for cash; the balance is on credit. 75% of the credit sales are collected in the month following the month of sale, with the balance collected in the following month. Variable operating expenses are 10% of sales revenue, and fixed operating expenses (all depreciation) are $3,000 per month. Cash payments for the variable operating expenses are made during the month the expenses are incurred. The total cash disbursements for August would be: $16.900 $13.900 O $20,100 O $17,100

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