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 $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:

  • $142,100

  • $205,100

  • $210,000

  • $224,000

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

Auditing And Assurance Services A Systematic Approach

Authors: William Messier, Steven Glover, Douglas Prawitt

5th Edition

007333720X, 9780073337203

More Books

Students also viewed these Accounting questions

Question

Draw the bode plot for the network function. Discuss briefly.

Answered: 1 week ago