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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
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