Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town...
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Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town In Montana. Data regarding the store's operations follow: o Sales are budgeted at $380,000 for November, $390,000 for December, and $400,000 for January. o Collections are expected to be 70% In the month of sale, 27% In the month following the sale, and 3% uncollectible. o The cost of goods sold is 65% of sales. o The company desires to have an ending merchandise Inventory equal to 80% of the following month's cost of goods sold. Payment for merchandise is made in the month following the purchase. o Other monthly expenses to be paid In cash are $22,000. o Monthly depreciation is $20,000. o lgnore taxes. Balance Sheet October 31 Assets Cash Accounts receivable, net of allowance for uncollectible accounts Inventory Property, plant and equipment, net of $502,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $13,000 77,000 197,600 992.000 _$1279,600 | $240,000 259 600 Total liabilities and stockholders' equity $1,279.600 Accounts payable at the end of December would be: $208,000 $50,700 $253,500 $258,700 O
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