Brarin Corporation is a small wholesaler of gourmet food products. Data regardin

Question

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $290,000 for November, $310,000 for December, and $300,000 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 would like to maintain ending merchandise inventories equal to 65% 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 $22,600. Monthly depreciation is $20,500. Ignore taxes. The difference between cash receipts and cash disbursements in December would be: A) $16,000 B) $45,250 C) $66,700 D) $26,525

Explanation / Answer

B) $45,250

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