Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:• Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.• Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.• The cost of goods sold is 70% of sales.• The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $24,600.• Monthly depreciation is $17,000.• Ignore taxes. Accounts payable at the end of December would be:
Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:• Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.• Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.• The cost of goods sold is 70% of sales.• The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $24,600.• Monthly depreciation is $17,000.• Ignore taxes. Accounts payable at the end of December would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:• Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.• Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.• The cost of goods sold is 70% of sales.• The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.• Other monthly expenses to be paid in cash are $24,600.• Monthly depreciation is $17,000.• Ignore taxes. Accounts payable at the end of December would be:
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