1.)Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

Sales are budgeted at $304,000 for November, $324,000 for December, and $224,000 for January.

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

The cost of goods sold is 75% of sales.

The company desires to have an ending merchandise inventory at the end of each month equal to 90% 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 $22,500.

Monthly depreciation is $28,000.

Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	33,500
Accounts receivable		84,000
Merchandise inventory		288,900
Property, plant and equipment, net of $624,000 accumulated depreciation		919,000
Total assets	$	1,325,400
Liabilities and Stockholders' Equity
Accounts payable	$	253,000
Common stock		754,000
Retained earnings		318,400
Total liabilities and stockholders' equity	$	1,325,400

Accounts payable at the end of December would be:

2.)

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

Sales are budgeted at $300,000 for November, $320,000 for December, and $220,000 for January.

Collections are expected to be 70% in the month of sale and 30% in the month following the sale.

The cost of goods sold is 75% of sales.

The company desires to have an ending merchandise inventory at the end of each month equal to 80% 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 $22,100.

Monthly depreciation is $26,000.

Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	30,000
Accounts receivable		82,000
Merchandise inventory		186,400
Property, plant and equipment, net of $624,000 accumulated depreciation		1,014,000
Total assets	$	1,312,400
Liabilities and Stockholders' Equity
Accounts payable	$	246,000
Common stock		750,000
Retained earnings		316,400
Total liabilities and stockholders' equity	$	1,312,400

Retained earnings at the end of December would be: