90.2K

Verified Solution

Link Copied!

Dilbert Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: o Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. o Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. o The cost of goods sold is 65% of sales. o The company desires to have an ending merchandise inventory at the end of each month equal to 60% of the next 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 $20,300. o Monthly depreciation is $20,000. o Ignore taxes.

Balance Sheet October 31
Assets
Cash	$27,000
Accounts receivable, net of allowance for uncollectible accounts	79,000
Merchandise inventory	101,400
Property, plant and equipment, net of $574,000 accumulated depreciation	1,082,000
Total assets	$1,289,400
Liabilities and Stockholders' Equity
Accounts payable	$169,000
Common stock	740,000
Retained earnings	380,400
Total liabilities and stockholders' equity	$1,289,400

The accounts receivable balance, net of uncollectible accounts, at the end of December would be:

$43,700

$46,000

$81,300

$93,100

Answer & Explanation Solved by verified expert

See Answer