Retained earnings at December 31 will be: The cash balance at the end of December would be:
Retained earnings at December 31 will be: The cash balance at the end of December would be:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F62308e0d-dfb9-4f16-9c84-981ccd5b4b9c%2F47df4775-dc43-4b8c-b883-f5eddfe91cc5%2Fl5btzed_processed.jpeg&w=3840&q=75)
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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