NUBD Company has budgeted its activity for October 2021 based on the following information: i. Sales are budgeted at P300,000. All sales are credit sales and a provision for doubtful accounts is made monthly at the rate of 3% of sales. ii. Merchandise inventory was P70,000 at September 30, 2021 and an increase of P10,000 was planned for the month. iii. All merchandise is marked-up to sell at invoice cost plus 50%. (Gross profit rate based on cost) iv. Estimated cash disbursements for selling and administrative expenses for the month are P40,000. v. Depreciation for the month is projected at P5,000. NUBD is projecting operating income for the month of October 2021 in the amount of P96,000 P56,000 P55,000 P46,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

NUBD Company has budgeted its activity for October 2021 based on the following information:
i. Sales are budgeted at P300,000. All sales are credit sales and a provision for doubtful accounts is made monthly at the rate of 3% of sales.
ii. Merchandise inventory was P70,000 at September 30, 2021 and an increase of P10,000 was planned for the month.
iii. All merchandise is marked-up to sell at invoice cost plus 50%. (Gross profit rate based on cost)
iv. Estimated cash disbursements for selling and administrative expenses for the month are P40,000.
v. Depreciation for the month is projected at P5,000.

NUBD is projecting operating income for the month of October 2021 in the amount of

  • P96,000
  • P56,000
  • P55,000
  • P46,000
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education