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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 $280,000 for November, $260,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $280,000 for November, $260,000 for December, and $250,000 for January. Collections are expected to be 45% in the month of sale and 55% in the month following the sale. The cost of goods sold is 80% of sales. 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. Other monthly expenses to be paid in cash are $23,400. Monthly depreciation is $14,400. Ignore taxes. Balance Sheet October 31 Assets Cash $ 21,800 Accounts receivable 71,800 Merchandise inventory 156,800 Property, plant and equipment, net of $573,800 accumulated depreciation 1,095,800 Total assets $ 1,346,200 Liabilities and Stockholders' Equity Accounts payable $ 255,800 Common stock 821,800 Retained earnings 268,600 Total liabilities and stockholders' equity $ 1,346,200 The cost of December merchandise purchases would be:
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $280,000 for November, $260,000 for December, and $250,000 for January.
Collections are expected to be 45% in the month of sale and 55% in the month following the sale.
The cost of goods sold is 80% of sales.
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.
Other monthly expenses to be paid in cash are $23,400.
Monthly depreciation is $14,400.
Ignore taxes.
Balance Sheet
October 31
Assets
Cash $ 21,800
Accounts receivable 71,800
Merchandise inventory 156,800
Property, plant and equipment, net of $573,800 accumulated depreciation 1,095,800
Total assets $ 1,346,200
Liabilities and Stockholders' Equity
Accounts payable $ 255,800
Common stock 821,800
Retained earnings 268,600
Total liabilities and stockholders' equity $ 1,346,200
The cost of December merchandise purchases would be:
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
7th Canadian edition
1119368456, 978-1119211587, 1119211581, 978-1119320623, 978-1119368458
