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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 $254.000 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 $254.000 for November, $294.000 for December, and $221,000 for January Collections are expected to be 60% In the month of sale and 40% 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 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 $15,600. Monthly depreciation is $26.500. Ignore taxes. $ Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,600 accumulated depreciation Total assets 32,600 82,500 182,880 916,000 $1,213,380 Liabilities and stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and sto holders' equity $ 250,000 751,000 212,380 $1,213,380 The cost of December merchandise purchases would be
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