Retained earnings at December 31 will be: The cash balance at the end of December would be:

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Miles Hardware sells fasteners and general building supplies to building contractors in a medium-sized town in
Montana. data regarding the store's operations in 2014 is collected as below:
Sales are budgeted at:
November $ 380,000
December $ 3 90,000
January $ 400,000
The following cash collection schedule is used:
The month of sale 70%
Next month 27%
Uncollectible 3%
Cost of goods sold: 65% of sales
Desired ending inventory equals to: 80% of the following 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: $ 22,000
Monthly depreciation: $ 20,000
Miles declares a dividend payable on December 15 of: $ 12,000 (paid on January 15, 2015)
Ignore taxes.
Balance Sheet on October 31
Assets
Cash $ 15,000
Accounts Receivable (net of allowance) $77,000
Inventory $ 197,600
Property, plant and equipment (net) $ 992,000
Total Assets $ 1,281,600
Liabilities and Stockholder's Equity
Accounts Payable $ 240,000
Common Stock $ 780,000
Retained Earnings $ 259,600
Total Liabilities and Stockholders Equity $ 1,279,600
Retained earnings at December 31 will be:
The cash balance at the end of December would be:
Transcribed Image Text:Miles Hardware sells fasteners and general building supplies to building contractors in a medium-sized town in Montana. data regarding the store's operations in 2014 is collected as below: Sales are budgeted at: November $ 380,000 December $ 3 90,000 January $ 400,000 The following cash collection schedule is used: The month of sale 70% Next month 27% Uncollectible 3% Cost of goods sold: 65% of sales Desired ending inventory equals to: 80% of the following 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: $ 22,000 Monthly depreciation: $ 20,000 Miles declares a dividend payable on December 15 of: $ 12,000 (paid on January 15, 2015) Ignore taxes. Balance Sheet on October 31 Assets Cash $ 15,000 Accounts Receivable (net of allowance) $77,000 Inventory $ 197,600 Property, plant and equipment (net) $ 992,000 Total Assets $ 1,281,600 Liabilities and Stockholder's Equity Accounts Payable $ 240,000 Common Stock $ 780,000 Retained Earnings $ 259,600 Total Liabilities and Stockholders Equity $ 1,279,600 Retained earnings at December 31 will be: The cash balance at the end of December would be:
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