Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $360,000 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 80% of sales. The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,500. Monthly depreciation is $15,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,500 Accounts receivable 70,500 Merchandise inventory 218,400 Property, plant and equipment, net of $572,500 accumulated depreciation 1,094,500 Total assets $ 1,403,900 Liabilities and Stockholders' Equity Accounts payable $ 254,500 Common stock 820,500 Retained earnings 328,900 Total liabilities and stockholders' equity $ 1,403,900 The cost of December merchandise purchases would be:
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $390,000 for November, $370,000 for December, and $360,000 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 80% of sales. The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $24,500. Monthly depreciation is $15,500. Ignore taxes. Balance Sheet October 31 Assets Cash $ 20,500 Accounts receivable 70,500 Merchandise inventory 218,400 Property, plant and equipment, net of $572,500 accumulated depreciation 1,094,500 Total assets $ 1,403,900 Liabilities and Stockholders' Equity Accounts payable $ 254,500 Common stock 820,500 Retained earnings 328,900 Total liabilities and stockholders' equity $ 1,403,900 The cost of December merchandise purchases would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
100%
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
- Sales are budgeted at $390,000 for November, $370,000 for December, and $360,000 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 80% of sales.
- The company would like to maintain ending merchandise inventories equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
- Other monthly expenses to be paid in cash are $24,500.
- Monthly
depreciation is $15,500. - Ignore taxes.
| October 31 | |
| Assets | |
|---|---|
| Cash | $ 20,500 |
| 70,500 | |
| Merchandise inventory | 218,400 |
| Property, plant and equipment, net of $572,500 |
1,094,500 |
| Total assets | $ 1,403,900 |
| Liabilities and |
|
| Accounts payable | $ 254,500 |
| Common stock | 820,500 |
| 328,900 | |
| Total liabilities and stockholders' equity | $ 1,403,900 |
The cost of December merchandise purchases would be:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education