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Q) What are the expected cash collections for RelyaTech in December? Multiple Choice O $90,000 O $314,000 $224,000

Q) What are the expected cash collections for RelyaTech in December? Multiple Choice O $90,000 O $314,000 $224,000

FINANCIAL ACCOUNTING
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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Q) What are the expected cash collections for RelyaTech in December? Multiple Choice O O $90,000 $314,000 $224,000 $320,000 D
Transcribed Image Text:Q) What are the expected cash collections for RelyaTech in December? Multiple Choice O O $90,000 $314,000 $224,000 $320,000 D
Data for RelyaTech, a large merchandiser, is below: Sales are budgeted at $300,000 for November, $320,000 for December, and $220,000 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. • RelyaTech 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 $22,100. • Monthly depreciation is $26,000. • Ignore taxes. . (ID#78786) 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 Show Transcribed Text Common stock Retained earnings Total liabilities and stockholders' equity C 30,000 82,000 186,400 1,014,000 $1,312,400 $ 246,000 750,000 750,000 316,400 $1,312,400
Transcribed Image Text:Data for RelyaTech, a large merchandiser, is below: Sales are budgeted at $300,000 for November, $320,000 for December, and $220,000 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. • RelyaTech 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 $22,100. • Monthly depreciation is $26,000. • Ignore taxes. . (ID#78786) 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 Show Transcribed Text Common stock Retained earnings Total liabilities and stockholders' equity C 30,000 82,000 186,400 1,014,000 $1,312,400 $ 246,000 750,000 750,000 316,400 $1,312,400
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