Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month following the sale. • The cost of goods sold is 75% of sales. • The company would like to maintain ending merchandise inventories equal to 60% 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 $24,000. • Monthly depreciation is $15,000. • Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements for December would be: $ 20,000 70,000 153,000 1,094,000 $ 1,337,000 $ 254,000 820,000 263,000 $ 1,337,000

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month following the sale. • The cost of goods sold is 75% of sales. • The company would like to maintain ending merchandise inventories equal to 60% 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 $24,000. • Monthly depreciation is $15,000. • Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements for December would be: $ 20,000 70,000 153,000 1,094,000 $ 1,337,000 $ 254,000 820,000 263,000 $ 1,337,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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TB Problem Qu. 09-154 Caprice Corporation is a wholesaler of industrial goods... Caprice Corporation is a wholesaler of industrial goods. Data regarding the store's operations follow: Sales are budgeted at $320,000 for November, $330,000 for December, and $310,000 for January. Collections are expected to be 40% in the month of sale, 59% in the month following the sale, and 1% uncollectible. The cost of goods sold is 75% of sales. The company desires an ending merchandise inventory equal to 20% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase. The November beginning balance in the accounts receivable account is $67,000. The November beginning balance in the accounts payable account is $254,000. Required: a. Prepare a Schedule of Expected Cash Collections for November and December. b. Prepare a Merchandise Purchases Budget for November and December.
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6) Oakton Furniture provided the following information relevant to its sales for December Year 1 and the first quarter of Year 2: Dec. Year 1 Jan. Year 2 Feb. Year 2 Mar. Year 2 (Actual) (Budget) (Budget) (Budget) Credit sales $120,000 $280,000 $310,000 $220,000 Cash sales 20,000 50,000 60,000 24,000 Based on the company's collection history, 42% of credit sales are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February are expected to be:
Please explain how we got the "December Cash Disbursements" as "$264300" Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: o Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. o Collections are expected to be 65% in the month of sale and 35% in the month following the sale. o The cost of goods sold is 80% of sales. o 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. o Other monthly expenses to be paid in cash are $21,100. o Monthly depreciation is $21,000. o Ignore taxes. Balance Sheet October 31 Assets Cash............................................................................................................. $ 25,000 Accounts…
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