Question
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: o Sales are budgeted at $474,000 for November, $430,000
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: o Sales are budgeted at $474,000 for November, $430,000 for December, and $374,000 for January. o Collections are expected to be 80% in the month of sale, 17% in the month following the sale, and 3% uncollectible. o The cost of goods sold is 80% of sales. o The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $28,950. o Monthly depreciation is $24,000. o Ignore taxes. Balance Sheet October 31 Assets Cash $28,300 Accounts receivable, net of allowance for uncollectible accounts 91,200 Merchandise inventory 265,440 Property, plant and equipment, net of $644,000 accumulated depreciation 1,288,000 Total assets $1,672,940 Liabilities and Stockholders' Equity Accounts payable $343,000 Common stock 840,000 Retained earnings 489,940 Total liabilities and stockholders' equity $1,672,940 December cash disbursements for merchandise purchases would be: rev: 10_25_2016_QC_CS-67321 $240,800 $314,000 $344,000 $354,560
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