Bramble Corporation is a small wholesaler of gourmet foodproducts. Data regarding the store's operations follow:
Sales are budgeted at $230,000 for November, $210,000 forDecember, and $200,000 for January.
Collections are expected to be 40% in the month of sale and 60%in the month following the sale.
The cost of goods sold is 65% of sales.
The company would like maintain ending merchandise inventoriesequal to 55% of the next month's cost of goods sold. Payment formerchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $22,900.
Monthly depreciation is $13,900.
Ignore taxes.
Balance Sheet
October 31 |
| Assets | | |
| Cash | $ | 22,300 |
| Accounts receivable | | 72,300 |
| Merchandise inventory | | 82,225 |
| Property, plant and equipment,net of $574,300 accumulated depreciation | | 1,096,300 |
| Total assets | $ | 1,273,125 |
| | |
| Liabilities andStockholders' Equity | | |
| Accounts payable | $ | 256,300 |
| Common stock | | 822,300 |
| Retained earnings | | 194,525 |
| Total liabilities andstockholders' equity | $ | 1,273,125 |
|
The difference between cash receipts and cash disbursements forDecember would be:
Multiple Choice
$56,750
$42,563
$29,225
$98,100
