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Sales are budgeted at $308,000 for November. $328,000 for December, and $228,000 for January. Collections are expected to be 65% in the month of sale
Sales are budgeted at $308,000 for November. $328,000 for December, and $228,000 for January. Collections are expected to be 65% in the month of sale and 35% 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 70% 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 $22.900. Monthly depreciation is $30.000. lgnore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets Liabilities and Shareholder's Equity Accounts payable Common shares Retained earnings Total liabilities and shareholder's equity $ 35,500 86,000 172,480 923,000 $ 1,216,980 $ 257,000 758,000 201,980 $ 1,216,980 tained earnings at the end of December would be: Multiple Choice 0 O $223,380 $199,480 O O $201.980 $254,780
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