Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 to 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Tax Audit Approach And Due Diligence Related To Tax Credits

Authors: Mohamed Ben Sassi

1st Edition

6204246941, 978-6204246949

More Books

Students also viewed these Accounting questions