QUESTION 13

1. The following information pertains to the January operating budget for Casey Corporation.

   Budgeted sales for January $203,000 and February $109,000.

   Collections for sales are 60% in the month of sale and 40% the next month.

   Gross margin is 30% of sales.

   Administrative costs are $19,000 each month.

   Beginning accounts receivable is $28,000.

   Beginning inventory is $18,000.

   Beginning accounts payable is $74,000. (All from inventory purchases.)

   Purchases are paid in full the following month.

   Desired ending inventory is 20% of next month's cost of goods sold (COGS).

   At the end of January, budgeted ending inventory is ________.

   		$33,260
   		$15,260
   		$21,800
   		$6540