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24) 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
24)
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 | 205,200 | |||||
Property, plant and equipment, net of $624,000 accumulated depreciation | 919,000 | |||||
Total assets | $ | 1,241,700 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 253,000 | ||||
Common stock | 754,000 | |||||
Retained earnings | 234,700 | |||||
Total liabilities and stockholders' equity | $ | 1,241,700 | ||||
Accounts payable at the end of December would be:
Multiple Choice
-
$243,000
-
$175,500
-
$24,300
-
$151,200
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