Assume a merchandising company's estimated sales for January, February, and March are $106,000 $126,000, and $116,000, respectively. Its cost of goods sold is always 35% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 25% of its merchandise purchases in the month of the purchase and the remaining 75% in the subsequent month. What are the cash disbursements for merchandise purchases that would appear in the company's cash budget for February? Multiple Choice $41,725 O $42,725 $39,725 $36,725

Assume a merchandising company's estimated sales for January, February, and March are $106,000 $126,000, and $116,000, respectively. Its cost of goods sold is always 35% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 25% of its merchandise purchases in the month of the purchase and the remaining 75% in the subsequent month. What are the cash disbursements for merchandise purchases that would appear in the company's cash budget for February? Multiple Choice $41,725 O $42,725 $39,725 $36,725

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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