Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $350,000 for November, $330,000 for December, and $320,000 for January.
Collections are expected to be 45% in the month of sale and 55% 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 80% 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 $24,100.
Monthly depreciation is $15,100.
Ignore taxes.
Balance Sheet
October 31
Assets Cash $ 20,100
Accounts receivable 70,100
Merchandise inventory 210,000
Property, plant and equipment, net of $572,100 accumulated depreciation 1,094,100
Total assets $ 1,394,300
Liabilities and Stockholders' Equity Accounts payable $ 254,100
Common stock 820,100
Retained earnings 320,100
Total liabilities and stockholders' equity $ 1,394,300
December cash disbursements for merchandise purchases would be:
Multiple Choice
$241,500
$247,500
$192,000
