Data for RelyaTech Corp, a large merchandiser, is below: • Sales are budgeted at $305,000 for November, $325,000 for December, and $225,000 for January . Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • RelyaTech desires to have an ending merchandise inventory at the end of each month 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 $22,600. - Monthly depreciation is $28,500. Ignore taxes . (ID#67076)
Data for RelyaTech Corp, a large merchandiser, is below: • Sales are budgeted at $305,000 for November, $325,000 for December, and $225,000 for January . Collections are expected to be 65% in the month of sale and 35% in the month following the sale. • The cost of goods sold is 80% of sales. • RelyaTech desires to have an ending merchandise inventory at the end of each month 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 $22,600. - Monthly depreciation is $28,500. Ignore taxes . (ID#67076)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:Data for RelyaTech Corp., a large merchandiser, is below:
• Sales are budgeted at $305,000 for November, $325,000 for December, and $225,000 for January
. Collections are expected to be 65% in the month of sale and 35% in the month following the sale.
The cost of goods sold is 80% of sales.
• RelyaTech desires to have an ending merchandise inventory at the end of each month 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 $22,600.
• Monthly depreciation is $28,500.
Ignore taxes
• (ID#67076)
Assets
Cash
Balance Sheet
October 31
Accounts receivable.
Merchandise inventory
Property, plant and equipment, net of $624,000 accumulated
depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
34,000
84,500
170,800
920,000
$1,209,300
$ 254,000
755,000
200,300
$1,209,300
Transcribed Image Text:Total liabilities and stockholders' equity
Q) What is the cost of December merchandise purchases for RelyaTech?
Multiple Choice
$260.000
$204,000
$126.000
$244,000
$1,209,300
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