Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: ⚫ Sales are budgeted at $302,000 for November, $322,000 for December, and $222,000 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. The company 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 $22,300. Monthly depreciation is $27,000. Ignore taxes. Assets Cash Balance Sheet October 31 $ 32,500 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: 83,000 287,900 917,000 $ 1,320,400 $ 251,000 752,000 317,400 $ 1,320,400 Multiple Choice $322,000 $105,700 $315,000 $209,300

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: ⚫ Sales are budgeted at $302,000 for November, $322,000 for December, and $222,000 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. The company 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 $22,300. Monthly depreciation is $27,000. Ignore taxes. Assets Cash Balance Sheet October 31 $ 32,500 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: 83,000 287,900 917,000 $ 1,320,400 $ 251,000 752,000 317,400 $ 1,320,400 Multiple Choice $322,000 $105,700 $315,000 $209,300

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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