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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 $281,000 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 $281,000 for November, $321,000 for December, and $212,000 for January.
- Collections are expected to be 75% in the month of sale and 25% 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 90% 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 $20,100.
- Monthly depreciation is $22,000.
- Ignore taxes.
Balance Sheet October 31 | ||||||
Assets | ||||||
Cash | $ | 29,000 | ||||
Accounts receivable | 78,000 | |||||
Merchandise inventory | 189,675 | |||||
Property, plant and equipment, net of $624,000 accumulated depreciation | 1,006,000 | |||||
Total assets | $ | 1,302,675 | ||||
Liabilities and Stockholders' Equity | ||||||
Accounts payable | $ | 241,000 | ||||
Common stock | 742,000 | |||||
Retained earnings | 319,675 | |||||
Total liabilities and stockholders' equity | $ | 1,302,675 | ||||
Retained earnings at the end of December would be:
Garrison 16e Rechecks 2017-10-03, 2017-10-31
Multiple Choice
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$361,675
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$319,675
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$385,975
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$364,875
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