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Q4. Expected cash collections in December are: a) $223,900 b) $233,400 c) $251,700 d) $253,700 e) $247,000 Q5. December cash disbursements for merchandise purchases would be:

Q4. Expected cash collections in December are: a) $223,900 b) $233,400 c) $251,700 d) $253,700 e) $247,000 Q5. December cash disbursements for merchandise purchases would be:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Q4. Expected cash collections in December are: a) $223,900 b) $233,400 c) $251,700 d) $253,700 e) $247,000 Q5. December cash disbursements for merchandise purchases would be:
Transcribed Image Text:Q4. Expected cash collections in December are: a) $223,900 b) $233,400 c) $251,700 d) $253,700 e) $247,000 Q5. December cash disbursements for merchandise purchases would be:
Use the following information to solve the next four questions. Data regarding the firm's store operations follow: Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. The cost of goods sold is 65% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 60% 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 $20,300. Monthly depreciation is $20,000. Ignore taxes. Balance Sheet October 31 Assets Cash 000' Accounts receivable, net of allowance for uncollectible accounts 000'6 101,400 Merchandise inventory Property, plant and equipment, net of $574,000 accumulated depreciation 1,082,000 $1,289,400 Total assets Liabilities and Stockholders' Equity Accounts payable 000'69 Common stock 000'0 380,400 Retained earnings $1,289,400 Total liabilities and stockholders' equity 10
Transcribed Image Text:Use the following information to solve the next four questions. Data regarding the firm's store operations follow: Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January. Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible. The cost of goods sold is 65% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 60% 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 $20,300. Monthly depreciation is $20,000. Ignore taxes. Balance Sheet October 31 Assets Cash 000' Accounts receivable, net of allowance for uncollectible accounts 000'6 101,400 Merchandise inventory Property, plant and equipment, net of $574,000 accumulated depreciation 1,082,000 $1,289,400 Total assets Liabilities and Stockholders' Equity Accounts payable 000'69 Common stock 000'0 380,400 Retained earnings $1,289,400 Total liabilities and stockholders' equity 10
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