Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $293,000 for

image text in transcribedimage text in transcribedimage text in transcribed

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $293,000 for November, $313,000 for December, and $213,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month 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 $21,400. Monthly depreciation is $22,500 Ignore taxes. . Balance Sheet S Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets 26,500 78,500 164,080 1,007,000 $1,276,080 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity S 239,000 743,000 294,080 $1,276,080 The cost of December merchandise purchases would be: Multiple Choice $250,400 O $234.400 O O $119,280 $194,400 O

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

Digital Transformation In Accounting

Authors: Richard Busulwa, Nina Evans

1st Edition

0367362090, 9780367362096

More Books

Students also viewed these Accounting questions

Question

If the job involves a client load or caseload, what is it?

Answered: 1 week ago