Question
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Collections are expected to be 80% in the month of sale and 20% in the month following the sale. The cost of goods sold is 75% of sales. The company would like to 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 $24,000. Monthly depreciation is $15,000. Ignore taxes.
Balance Sheet October 31 | |||
Assets | |||
Cash | $ | 20,000 | |
Accounts receivable | 70,000 | ||
Merchandise inventory | 153,000 | ||
Property, plant and equipment, net of $572,000 accumulated depreciation | 1,094,000 | ||
Total assets | $ | 1,337,000 | |
Liabilities and Stockholders' Equity | |||
Accounts payable | $ | 254,000 | |
Common stock | 820,000 | ||
Retained earnings | 263,000 | ||
Total liabilities and stockholders' equity | $ | 1,337,000 | |
December cash disbursements for merchandise purchases would be:
Group of answer choices
$246,000
$139,500
$240,000
$235,500
None of the above
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