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The cost of December merchandise purchases would be: Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's
The cost of December merchandise purchases would be:
Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $281,000 for November, $321,000 for December, and $212,000 for January Collections are expected to be 75% in the month of sale and 25% in the month following the sale. The cost of goods sold is 75% 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 $20,100. Monthly depreciation is $22,000. Ignore taxes. $ Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets 29,000 78,000 189,675 1,006,000 $1,302,675 $ Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings 241,000 742,000 319, 675Step by Step Solution
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