90.2K

Verified Solution

Link Copied!

Remaining Time: 1 hour, 55 minutes, 47 seconds. Question Completion Status: 1 2 3 4 Assets Cash Accounts receivable Inventory Buildings and equipment, net of depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock $65,200 38,800 43,300 125,000 $272,300 $ 66,200 Retained earnings Total liabilities and stockholders' equity 70,000 136,100 $272,300 The company is in the process of preparing a budget for October and has assembled the following data: 1. Sales are budgeted at $121,000 for October and $141,000 for November. Of these sales, 40% will be for cash; the remainder will be credit sales. 50% of a month's credit sales are collected in the month the sales are made, and the remaining 50% is collected in the following month. All of the September 30 accounts receivable will be collected in October. 2. The budgeted cost of goods sold is always 60% of sales and the ending merchandise inventory is always 30% of the following month's cost of goods sold. 3. All merchandise purchases are on account. Thirty percent of all purchases are paid for in the month of purchase and 70% are paid for in the following month. All of the September 30 accounts payable to suppliers will be paid during October. 4. Selling and administrative expenses for October are budgeted at $24,800, exclusive of depreciation. These expenses will be paid in cash. Depreciation is budgeted at $1,600 for the month Required: Using the information provided, prepare the following: a. The budgeted cash collections for October. b. The budgeted merchandise purchases for October. c. The budgeted cash disbursements for merchandise purchases for October. d. The budgeted net operating income for October

Answer & Explanation Solved by verified expert

See Answer