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Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $294,000 for
Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:
- Sales are budgeted at $294,000 for November, $314,000 for December, and $214,000 for January.
- Collections are expected to be 70% in the month of sale and 30% in the month following the sale.
- The cost of goods sold is 75% of sales.
- The company desires to have an ending merchandise inventory at the end of each month equal to 80% 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 $21,500.
- Monthly depreciation is $23,000.
- Ignore taxes.
Balance Sheet October 31 | ||||||
Assets | ||||||
Cash | $ | 27,000 | ||||
Accounts receivable | 79,000 | |||||
Merchandise inventory | 176,400 | |||||
Property, plant and equipment, net of $624,000 accumulated depreciation | 1,008,000 | |||||
Total assets | $ | 1,290,400 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 240,000 | ||||
Common stock | 744,000 | |||||
Retained earnings | 306,400 | |||||
Total liabilities and stockholders' equity | $ | 1,290,400 | ||||
The difference between cash receipts and cash disbursements for December would be:
Brewer 8e Rechecks 2019-26-08
Multiple Choice
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$88,250
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$54,000
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$34,250
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$27,000
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