Question
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $440,000 for November, $460,000 for
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $440,000 for November, $460,000 for December, and $450,000 for January. Collections are expected to be 65% in the month of sale, 34% in the month following the sale, and 1% uncollectible. The cost of goods sold is 80% 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 $24,100. Monthly depreciation is $22,000. Ignore taxes. December cash disbursements for merchandise purchases would be: $368,000 $252,000 $363,200 $362,400
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