Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $291,000 for November, $311,000 for December, and $211,000 for January. • Collections are expected to be 70% in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 80% 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 $21,200. • Monthly depreciation is $21,500. Ignore taxes. ● 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 Expected cash collections in December are: $ 25,500 77,500 162,900 1,027,000 $ 1,292,900 $ 240,000 741,000 311,900 $ 1,292,900

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $291,000 for November, $311,000 for December, and $211,000 for January. • Collections are expected to be 70% in the month of sale and 30% in the month following the sale. • The cost of goods sold is 75% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 80% 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 $21,200. • Monthly depreciation is $21,500. Ignore taxes. ● 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 Expected cash collections in December are: $ 25,500 77,500 162,900 1,027,000 $ 1,292,900 $ 240,000 741,000 311,900 $ 1,292,900

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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