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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 $370,000 for November, $350,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
- Sales are budgeted at $370,000 for November, $350,000 for December, and $340,000 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 maintain ending merchandise inventories equal to 60% 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 $24,300.
- Monthly depreciation is $15,300.
- Ignore taxes.
Balance Sheet October 31 |
| ||
Assets | | | |
Cash | $ | 20,300 | |
Accounts receivable | | 70,300 | |
Merchandise inventory | | 155,400 | |
Property, plant and equipment, net of $572,300 accumulated depreciation | | 1,094,300 | |
Total assets | $ | 1,340,300 | |
| | | |
Liabilities and Stockholders' Equity | | | |
Accounts payable | $ | 254,300 | |
Common stock | | 820,300 | |
Retained earnings | | 265,700 | |
Total liabilities and stockholders' equity | $ | 1,340,300 | |
Required:
1. Prepare the cash receipts for December.
2. Prepare the cash disbursements for December.
3. Calculate the difference between cash receipts and cash disbursements for December.
Please show process.
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