Question
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $270,000 for November, $290,000 for
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: |
Sales are budgeted at $270,000 for November, $290,000 for December, and $280,000 for January. | |
Collections are expected to be 50% in the month of sale, 49% in the month following the sale, and 1% uncollectible. | |
The cost of goods sold is 75% of sales. | |
The company would like to maintain ending merchandise inventories equal to 65% 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 $22,400. | |
Monthly depreciation is $20,300. | |
Ignore taxes. |
The difference between cash receipts and cash disbursements in December would be:
$42,650
$63,900
$16,000
$25,325
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