Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $304,000 for November, $324,000 for December, and $224,000 for January. • Collections are expected to be 60% in the month of sale and 40% 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 90% 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 $22,500. Monthly depreciation is $2,000. • Ignore taxes. Assets Cash 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 Balance Sheet October 31 Retained earnings at the end of December would be: $ 33,500 84,000 205,200 919,000 $1,241,700 $ 253,000 754,000 234,700 $1,241,700

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: • Sales are budgeted at $304,000 for November, $324,000 for December, and $224,000 for January. • Collections are expected to be 60% in the month of sale and 40% 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 90% 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 $22,500. Monthly depreciation is $2,000. • Ignore taxes. Assets Cash 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 Balance Sheet October 31 Retained earnings at the end of December would be: $ 33,500 84,000 205,200 919,000 $1,241,700 $ 253,000 754,000 234,700 $1,241,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Top executive officers of Rundle Company, a merchandising firm, are preparing the next year's budget. The controller has provide everyone with the current year's projected income statement. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Current Year $ 1,998,800 1,425,000 475,000 266,000 $ 209,000 Cost of goods sold is usually 75 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales a fixed cost of $76,000. The president has announced that the company's goal is to increase net income by 10 percent. Required The following items are independent of each other: a. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? b. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 1 percent. Prepare a…
Top executive officers of Tildon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement. Current Year Sales revenue $ 1,600,000 Cost of goods sold 1,120,000 Gross profit 480,000 Selling & administrative expenses 190,000 Net income $ 290,000 Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $30,000. The president has announced that the company’s goal is to increase net income by 15 percent. Required The following items are independent of each other: Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production…
Weller Industrial Ges Corporation supplies acetylene and other compressed geses to industry. Dets regarding the store's operations follow: Sales are budgeted at $300,000 for November, $320,000 for December, and $310,000 for January Collections are expected to be 75% in the month of sale and 25% in the month following the sale. The cost of goods sold is 76% of sales. The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $20, 600. Monthly depreciation is $20,400. Ignore taxes Balance Sheet October 31 Assets Cash $ 21,400 Accounts receivable 82,400 Merchandise inventory 182,400 Property, plant and equipment (net of $590,000 accumulated depreciation) 1,000,000 Total assets $1,286, 200 Liabilities and Shareholder's Equity Accounts payable $ 195,400 Common shares 550,000 Retained earnings 540,800 Total liabilities and…
Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Sales are budgeted at $460,000 for November, $440,000 for December, and $430,000 for January. Collections are expected to be 45% in the month of sale and 55% 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 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 $25,200. Monthly depreciation is $16,200. Ignore taxes. Balance SheetOctober 31 Assets Cash $ 20,000 Accounts receivable 70,000 Merchandise inventory 153,000 Property, plant and equipment, net of $572,000 accumulated depreciation 1,094,000 Total assets $ 1,337,000 Liabilities and Stockholders' Equity Accounts payable $ 254,000 Common stock 820,000 Retained earnings…
please answer do not image format
(The following information applies to the questions displayed below.] Shadee Corporation expects to sell 600 sun shades in May and 800 in June. Each shade sells for $180. Shadee's beginning and ending finished goods inventories for May are 75 and 50 shades, respectively. Ending finished goods inventory for June will be 60 shades. Required: 1. Determine Shadee's budgeted total sales for May and June, 2. Determine Shadee's budgeted production in units for May and June. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine Shadee's budgeted total sales for May and June Budgeted Total Sales May Juna
Jackson Inc. produces leather handbags. The production budget for the next four months is: July 5,300 units, August 7,700 units, September 8,400 units, October 8,100 units. Each handbag requires 0.5 square meters of leather. Jackson Inc.’s leather inventory policy is 30% of next month’s production needs. On July 1 leather inventory was expected to be 795 square meters. What will leather purchases be in July? Multiple Choice 2,760 square meters 4,035 square meters 3,010 square meters 3,160 square meters
Shamrock Shades purchases sunglasses from bulk discounters and sells the sunglasses in mall kiosks throughout the Pacific Northwest. Shamrock is in the process of budgeting for the coming year and has projected sales of $360,000 for January, $440,000 for February, $600,000 for March, and $640,000 for April. Shamrock's desired ending inventory is 55 percent of the following month's cost of goods sold. Cost of goods sold is expected to be 45 percent of sales. Required: Compute the required purchases for each month of the first quarter (January through March). January Required Purchases February March
The following is a schedule of the projected unit sales of Western Company, which manufactures casual wear. Each unit sells for $25. The company began the period with a beginning accounts receivable balance of $10,000. Choose the correct answer from the options provided. Budgeted unit sales Percentage of sales collected in the quarter of the sale Percentage of sales collected in the quarter after the sale. Quarter First Second Third Fourth 1,500 1,300 1,400 1,300 Knowledge Check 01 What is the amount of budgeted sales revenue for the fourth quarter? O $32,500 $33,750 O $35,000 $37,500 $8,125 O $8,750 O $9,375 O $28,125 Year 5,500 75% 25% Knowledge Check 02 What is the amount of cash that is expected to be collected during the second quarter as a result of sales made during the first quarter?
Timpco, a retailer, makes both cash and credit sales (i.e., sales on open account). Information regarding budgeted sales for the last quarter of the year is as follows: October November December Cash sales $ 80,000 $ 71,000 $ 83,000 Credit sales 80,000 85,200 91,300 Total $ 160,000 $ 156,200 $ 174,300 Past experience shows that 5% of credit sales are uncollectible. Of the credit sales that are collectible, 60% are collected in the month of sale; the remaining 40% are collected in the month following the month of sale. Customers are granted a 1.5% discount for payment within 10 days of billing. Approximately 75% of collectible credit sales take advantage of the cash discount. Inventory purchases each month are 100% of the cost of the following month’s projected sales. (The gross profit rate for Timpco is approximately 30%.) All merchandise purchases are made on credit, with 20% paid in the month of purchase and the remainder paid in the following month. No cash discounts…
Melissa reviewed her six-month plan for Orchard Creek's Children's Accessory Department, including the actual performance for August and September. She also observed the department's current performance from October 1 through October 15. In her midmonth analysis, Melissa observed the following: Planned sales for October were $7,891 Actual sales from October 1 through October 15 were $3,529 The value merchandise on-order scheduled to arrive before the end of October is $2,749 Planned markdown for October was 1,560 Actual markdown taken from October 1 through October 15 was $715 Stock on hand as of October 15 is valued at $22,160 Planed EOM for October were $18,272 Markup % is 61.5 % What is the open-to-buy remaining for the month of October? Please calculate 1) OTB at Retail and 2) OTB at Cost Edit View Insert Format Toole T-LI.
Hardev