Assume the following budgeted information for a merchandising company: • Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. • Cash collections related to credit sales are expected to be 75% in the month of sale, 25% in the month following the sale. • The cost of goods sold is 65% of sales. • Each month's ending inventory equals 20% of next month's cost of goods sold. • 40 % of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incuried total $20,500. • Monthly depreciation expense is $20,000. The expected cash disbursements for merchandise purchases in December are: $151,320. $212,800. $149,540. O $232,800

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Assume the following budgeted information for a merchandising company:
Budgeted sales (all on credit) for November, December, and January are $250,000,
$220,000, and $200,000, respectively.
• Cash collections related to credit sales are expected to be 75% in the month of sale, 25%
in the month following the sale.
• The cost of goods sold is 65% of sales.
• Each month's ending inventory equals 20% of next month's cost of goods sold.
• 40% of each month's merchandise purchases are paid in the current month and the
remainder is paid in the following month.
• Monthly selling and administrative expenses that are paid in cash in the month incurred
total $20,500.
• Monthly depreciation expense is $20,000.
The expected cash disbursements for merchandise purchases in December are:
O $151,320.
$212,800.
$149,540.
$232,800,
Transcribed Image Text:Assume the following budgeted information for a merchandising company: Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. • Cash collections related to credit sales are expected to be 75% in the month of sale, 25% in the month following the sale. • The cost of goods sold is 65% of sales. • Each month's ending inventory equals 20% of next month's cost of goods sold. • 40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500. • Monthly depreciation expense is $20,000. The expected cash disbursements for merchandise purchases in December are: O $151,320. $212,800. $149,540. $232,800,
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