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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 $320,000 for November, $300,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
- Sales are budgeted at $320,000 for November, $300,000 for December, and $290,000 for January.
- Collections are expected to be 55% in the month of sale and 45% in the month following the sale.
- The cost of goods sold is 70% 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 $23,800.
- Monthly depreciation is $14,800.
- Ignore taxes.
Balance Sheet October 31 | ||||||
Assets | ||||||
Cash | $ | 21,400 | ||||
Accounts receivable | 71,400 | |||||
Merchandise inventory | 156,800 | |||||
Property, plant and equipment, net of $573,400 accumulated depreciation | 1,095,400 | |||||
Total assets | $ | 1,345,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 255,400 | ||||
Common stock | 821,400 | |||||
Retained earnings | 268,200 | |||||
Total liabilities and stockholders' equity | $ | 1,345,000 | ||||
The cost of December merchandise purchases would be:
Answers:
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$142,100
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$205,100
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$210,000
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$224,000
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