Question
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $430,000 for November, $410,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $430,000 for November, $410,000 for December, and $400,000 for January.
Collections are expected to be 60% in the month of sale and 40% in the month following the sale.
The cost of goods sold is 85% of sales.
The company would like maintain ending merchandise inventories equal to 75% 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 $24,900. M
onthly depreciation is $15,900.
Ignore taxes.
Balance Sheet October 31
Assets
Cash$20,900
Accounts receivable 70,900
Merchandise inventory 274,125
Property, plant and equipment, net of $572,900 accumulated depreciation 1,094,900
Total assets$1,460,825
Liabilities and Stockholders' Equity
Accounts payable$254,900
Common stock 820,900
Retained earnings 385,025
Total liabilities and stockholders' equity$1,460,825
The difference between cash receipts and cash disbursements for December would be:
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