Question
Bob's Modern Fumes Company provides liquid nitrogen and various other deadly fumes. Data regarding Bob's operations follow. Sales are budgeted at $300,000 for November, $320,000
Bob's Modern Fumes Company provides liquid nitrogen and various other deadly fumes. Data regarding Bob's operations follow. Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 65% in the month of sale, 30% in the month following the sale, and 5% uncollectible. Beginning November accounts receivable is $93,000. The cost of goods sold is 75% of sales. The company purchases 70% of its deadly fumes in the month prior to the month of sale and 30% in the month of sale. Payments for purchases are 40% in the month of purchase and 60% in the following month. Other monthly expenses to be paid in cash are $22,900. The Monthly depreciation is $21,000. The company has a desired ending cash balance of at least $35,000. It has an available line-of-credit for borrowing, if necessary, at 12% interest per annum. Assume that after the company acquired land and paid dividends in November, such that the beginning cash balance in December is $45,000. Required: [ Select ] What are the expected cash dollections for December? [ Select ] What are merchandise purchases for December? [ Select ] What are disbursements related to merchandise purchases in December? [ Select ] What is the ending cash balance in December given the beginning balance above? [ Select ] Ignoring taxes, what is income for December?
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