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I require help with all questions, thank you so much in advance! 2. Carver Lumber sells lumber and general building supplies to building contractors in
I require help with all questions, thank you so much in advance!
2. Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: . Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January. Twenty percent of the sales each month are cash sales and the rest is on account (credit sales). Collections are expected to be 90% in the month of sale and 10% in the month following the sale. The cost of goods sold is 75% of sales. The company desires to have an ending merchandise inventory equal to 60% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Monthly SGA expenses to be paid in cash are $24,700. Monthly depreciation is $16,000. Ignore taxes. $ 19,000 77,000 157,500 Balance Sheet October 31 Assets Cash Accounts receivable Inventory Property, plant and equipment, net of $502,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity 1,002,000 $ 1,255,500 $ 272,000 780,000 203,500 $ 1,255,500 Required: a. Calculate the budgeted net operating income for November and December. b. Calculate the expected cash to be collected in November and December. c. Calculate the budgeted purchases for November. d. Calculate the budgeted cash balance as of December 31. e. Calculate the Accounts Receivable Balance as of December 31Step by Step Solution
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