Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Assume the following budgeted information for a merchandising company: Budgeted sales (all on credit) for November, December, and January are $249,000, $219,000, and $210,000, respectively.
Assume the following budgeted information for a merchandising company:
- Budgeted sales (all on credit) for November, December, and January are $249,000, $219,000, and $210,000, respectively.
- Cash collections of credit sales are expected to be 70% in the month of sale and 30% in the month following the sale.
- The cost of goods sold is always 65% of sales. Each months ending inventory equals 15% of next months cost of goods sold.
- 40% of each months merchandise purchases are paid in the current month and the remainder is paid in the following month.
- Monthly selling and administrative expenses that are paid in cash in the month incurred total $25,500.
- Monthly depreciation expense is $25,000.
What are the expected cash collections from customers in December?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started