5)Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $270,000 for November, $250,000 for December, and $240,000 for January.
• Collections are expected to be 50% in the month of sale and 50% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company would like to maintain ending merchandise inventories equal to 65% 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 $23,300.
• Monthly depreciation is $14,300.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	21,900
Accounts receivable		71,900
Merchandise inventory		131,625
Property, plant and equipment, net of $573,900 accumulated depreciation		1,095,900
Total assets	$	1,321,325
Liabilities and Stockholders' Equity
Accounts payable	$	255,900
Common stock		821,900
Retained earnings		243,525
Total liabilities and stockholders' equity	$	1,321,325

The difference between cash receipts and cash disbursements for December would be:

Multiple Choice

• $43,950

• $32,963

• $26,825

• $87,100

6)

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

• Sales are budgeted at $291,000 for November, $311,000 for December, and $211,000 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 $21,200.
• Monthly depreciation is $21,500.
• Ignore taxes.

Balance Sheet October 31
Assets
Cash	$	25,500
Accounts receivable		77,500
Merchandise inventory		174,600
Property, plant and equipment, net of $624,000 accumulated depreciation		1,027,000
Total assets	$	1,304,600
Liabilities and Stockholders' Equity
Accounts payable	$	240,000
Common stock		741,000
Retained earnings		323,600
Total liabilities and stockholders' equity	$	1,304,600

The cost of December merchandise purchases would be:

Multiple Choice

• $233,250

• $218,250

• $126,600

• $173,250

7)

Roberts Enterprises has budgeted sales in units for the next five months as follows:

June	4,630	units
July	7,750	units
August	5,430	units
September	6,960	units
October	3,830	units

Past experience has shown that the ending inventory for each month must be equal to 20% of the next month's sales in units. The inventory on May 31 contained 926 units. The company needs to prepare a production budget for the second quarter of the year.

The total number of units to be produced in July is:

Multiple Choice

• 8,836 units

• 7,750 units

• 7,286 units

• 8,066 units