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:

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow Sales are budgeted at $300,000 for November, $310,000 for December, and $310,000 for January . Collections are expected to be 80% in the month of sale, 17% in the month following the sale, and 3% uncollectible. ·The cost of goods sold is 65% of sales. ·The company would like to maintain ending merchandise inventories equal to 55% 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 pald in cash are $20,700. Monthly depreciation is $17,900 · ignore taxes. Balance Sheet October 31 Assets Cash Accounts recelvable, net of allowance for uncollectible accounts Merchandise inventory Property, plant and equipment, net of $627,000 accumulated depreciation Total assets $51,000 99,000 107,250 1,285,000 $1,542,250 Liabilitles and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity $291,250 870,000 381,000 $1,542,250 December cash disbursements for merchandise purchases would be

Explanation / Answer

November December January Sales $4,30,000 $4,50,000 $4,50,000 Cost of goods sold - 85% of Sales $3,65,500 $3,82,500 $3,82,500 Add: Desired Ending Inventory $2,86,875 $2,86,875 Total Mechandise Inventory required $6,52,375 $6,69,375 Less: Beginning Inventory $2,74,125 $2,86,875 Purchase of Inventory $3,82,500 Hence the correct option is $3,82,500

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.