Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month following the sale. • The cost of goods sold is 75% of sales. • The company would like to maintain ending merchandise inventories equal to 60% 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 $24,000. • Monthly depreciation is $15,000. • Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements for December would be: $ 20,000 70,000 153,000 1,094,000 $ 1,337,000 $ 254,000 820,000 263,000 $ 1,337,000
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. • Collections are expected to be 80% in the month of sale and 20% in the month following the sale. • The cost of goods sold is 75% of sales. • The company would like to maintain ending merchandise inventories equal to 60% 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 $24,000. • Monthly depreciation is $15,000. • Ignore taxes. Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements for December would be: $ 20,000 70,000 153,000 1,094,000 $ 1,337,000 $ 254,000 820,000 263,000 $ 1,337,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:TB MC Qu. 8-121 (Static) Bramble Corporation is a small wholesaler of ...
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
• Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January.
• Collections are expected to be 80% in the month of sale and 20% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company would like to maintain ending merchandise inventories equal to 60% 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 $24,000.
• Monthly depreciation is $15,000.
• Ignore taxes.
Assets
Cash
Balance Sheet
October 31
Accounts receivable
Merchandise inventory
Property, plant and equipment, net of $572,000 accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
The difference between cash receipts and cash disbursements for December would be:
$ 20,000
70,000
153,000
1,094,000
$ 1,337,000
$ 254,000
820,000
263,000
$ 1,337,000
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