Problem 8-96 Randall Company is a merchandising company that sells a single...

Randall Company is a merchandising company that sells a single product. The company's inventories, production, and sales in units for the next three months have been forecasted as follows:

	October	November	December
Beginning inventory	12,000	12,000	12,000
Merchandise purchases	47,000	57,000	22,000
Sales	47,000	57,000	27,000
Ending inventory	12,000	12,000	7,000

Units are sold for $12 each. One fourth of all sales are paid for in the month of sale and the balance are paid for in the following month. Accounts receivable at September 30 totaled $442,000.

Merchandise is purchased for $5 per unit. Half of the purchases are paid for in the month of the purchase and the remainder are paid for in the month following purchase. Selling and administrative expenses are expected to total $112,000 each month. One half of these expenses will be paid in the month in which they are incurred and the balance will be paid in the following month. There is no depreciation. Accounts payable at September 30 totaled $282,000 includes selling and administrative payables.

Cash at September 30 totaled $72,000. A payment of $292,000 for purchase of equipment is scheduled for November, and a dividend of $192,000 is to be paid in December.