Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow • Sales are budgeted at $303.000 for November, $323,000 for December, and $229,000 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 $22,400. Monthly depreciation is $27,500. 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 The cost of December merchandise purchases would be: $33,000 83,500 181,800 918,000 $1,216,300 $252,000 753,000 211,300 $1,216,300

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow • Sales are budgeted at $303.000 for November, $323,000 for December, and $229,000 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 $22,400. Monthly depreciation is $27,500. 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 The cost of December merchandise purchases would be: $33,000 83,500 181,800 918,000 $1,216,300 $252,000 753,000 211,300 $1,216,300

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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