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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 Accounts receivable Merchandise inventory Property, plant and equipment, net of $574,300 accumulated depreciation Total assets 22,300 72,300 82,225 1,096,300 $1,273, 125 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $ 256,300 822,300 194,525 $1,273, 125 The cost of December merchandise purchases would be: The cost of December merchandise purchases would be: Multiple Choice o 571,500 $71,500 o $136,500 o $132,925 o $149,500
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