Traders, Inc.

Balance Sheet

September 30, 200B

Assets

Liabilities and Equity

Cash

P416,000

Accounts payable

P1400,000

Accounts Receivable, net

1,200,000

Capital stock

7,200,000

Merchandise inventory

2,520,000

Retained earnings

7,536,000

Non-current assets

8,000,000

Total assets

P12,136,000

Total liabilities and stockholders' equity

12,136,000

Additional information:

Budgeted sales for October is P4,160,000; for November P4,000,000.

Gross profit rate is 20%

Of the total sales, 40% is on credit which the company collects in the month following the month of sale.

Purchases in each month are composed of:

80% of the coming month's requirement

20% of the current month's requirement

Purchases are paid for in the month following the month of purchase

1.The budgeted cash collections for the month of October is

a. P3,696,000c. P4,160,000

b. P1,664,000d. P3,216,000

2. Budgeted purchases during October is

a. P3,328,000c. P3,225,600

b. P8,320,000d. P4,032,000

3. The budgeted gross profit for the month of October is

a. P832,000c. P4,288,000

b. P3,328,000d. P4,160,000