Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: o Sales

Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: o Sales are budgeted at $346,000 for November, $356,000 for December, and $366,000 for January. o Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3% uncollectible. o The cost of goods sold is 70% of sales. o The company desires to have an ending merchandise inventory equal to 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid in cash are $33,450. o Monthly depreciation is $21,400. o Ignore taxes.

Balance Sheet October 31
Assets
Cash $ 18,500
Accounts receivable, net of allowance for uncollectible accounts 80,400
Inventory 231,500
Property, plant and equipment, net of $453,000 accumulated depreciation 906,000
Total assets $1,236,400
Liabilities and Stockholders' Equity
Accounts payable $ 222,000
Common stock 780,000
Retained earnings 234,400
Total liabilities and stockholders' equity $1,236,400

The cash balance at the end of December would be:

$128,520

$66,020

$18,500

$147,020

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting 1

Authors: Ray H. Garrison

1st Edition

1259114457, 978-1259114458

More Books

Students also viewed these Accounting questions