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
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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Accounting
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Transcribed Image Text:Multiple Choice
O
O
O
$185,850
$195,650
$182,250
$192,250
Transcribed Image Text: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
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