Bracken Corporation is a small wholesaler of gourmet food products. Data regardi
ID: 2467455 • Letter: B
Question
Bracken Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $390,000 for November, $410,000 for December, and $410,000 for January.
Collections are expected to be 75% in the month of sale, 24% in the month following the sale, and 1% uncollectible.
The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
$1,527,400
$1,527,400
December cash disbursements for merchandise purchases would be:
$229,600
$328,000
$323,200
$300,800
•Sales are budgeted at $390,000 for November, $410,000 for December, and $410,000 for January.
•Collections are expected to be 75% in the month of sale, 24% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 80% of sales. •The company would like to maintain ending merchandise inventories equal to 70% 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 $22,300. • Monthly depreciation is $19,500. • Ignore taxes.Explanation / Answer
$$323,200 Statement showing computations Particulars November December January Sales 390,000.00 410,000.00 410,000.00 Cost of goods sold @80% 312,000.00 328,000.00 328,000.00 Ending inventory =70% of next month COGS 229,600.00 229,600.00 Beginning inventory = Ending Inv of previous month 218,400.00 229,600.00 229,600.00 Inventory Purchased = COGS+Ending - Beginning 323,200.00 328,000.00 Payment in next month for Merchandise 323,200.00 328,000.00
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