Question
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $230,000 for November, $210,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $230,000 for November, $210,000 for December, and $200,000 for January.
Collections are expected to be 40% in the month of sale and 60% in the month following the sale.
The cost of goods sold is 65% of sales.
The company would like maintain ending merchandise inventories equal to 55% 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 $22,900.
Monthly depreciation is $13,900.
Ignore taxes.
Balance Sheet October 31 | ||||||
Assets | ||||||
Cash | $ | 22,300 | ||||
Accounts receivable | 72,300 | |||||
Merchandise inventory | 82,225 | |||||
Property, plant and equipment, net of $574,300 accumulated depreciation | 1,096,300 | |||||
Total assets | $ | 1,273,125 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 256,300 | ||||
Common stock | 822,300 | |||||
Retained earnings | 194,525 | |||||
Total liabilities and stockholders' equity | $ | 1,273,125 | ||||
The difference between cash receipts and cash disbursements for December would be:
Multiple Choice
$56,750
$42,563
$29,225
$98,100
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