Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help
Question:
Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows:
Sales ........................................................................................ $ 700,000
Gross profit (as a percent of sales) ............................................... 30%
Increase in trade accounts receivable for the month ........ $ 20,000
Change in accounts payable during month .................................... 0
Increase in inventory during month .................................... $ 10,000
Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense.
Required:
On the basis of the preceding data, what are the estimated cash disbursements from operations for June 20X1?
Step by Step Answer:
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer