Patty Corporation has estimated its activity for December 2006. Selected data from these estimated amounts are as follows:SalesP350,000Gross Profit (based on sales)30%Increase in trade account receivable during monthP10,000Change in accounts payable during the month0Increase in inventory during the monthP5,000Variable selling, and general and administrative expenses (S, G&A) include uncollectible accounts of 1% of sales.Total S, G&A is P35,000 per month plus 15% of salesDepreciation expense of P20,000 per month is included in fixed S,G&A.On the basis of the above data, what are estimated cash receipts from operations for December? A. P336,500B. P340,000C. P346,500D. P350,000

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Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter8: Inventories: Special Valuation Issues

Section: Chapter Questions

Problem 11RE: Johnson Corporation had beginning inventory of 20,000 at cost and 35,000 at retail. During the year,...

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Patty Corporation has estimated its activity for December 2006. Selected data from these estimated amounts are as follows:

Sales	P350,000
Gross Profit (based on sales)	30%
Increase in trade account receivable during month	P10,000
Change in accounts payable during the month	0
Increase in inventory during the month	P5,000
Variable selling, and general and administrative expenses (S, G&A) include uncollectible accounts of 1% of sales.
Total S, G&A is P35,000 per month plus 15% of sales
Depreciation expense of P20,000 per month is included in fixed S,G&A.

On the basis of the above data, what are estimated cash receipts from operations for December?
A. P336,500
B. P340,000
C. P346,500
D. P350,000

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