Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales $ 700,000 Gross profit (as a percent of sales) 30 % Increase in trade accounts receivable for the month $ 20,000 Change in accounts payable during month 0 Increase in inventory during month $ 10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative
Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales $ 700,000 Gross profit (as a percent of sales) 30 % Increase in trade accounts receivable for the month $ 20,000 Change in accounts payable during month 0 Increase in inventory during month $ 10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Serven Corporation has estimated its accrual-basis revenue and expenses for June 20X1 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows:
| Sales | $ | 700,000 | |
| Gross profit (as a percent of sales) | 30 | % | |
| Increase in trade |
$ | 20,000 | |
| Change in accounts payable during month | 0 | ||
| Increase in inventory during month | $ | 10,000 | |
| Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. | |||
| Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. | |||
Required:
On the basis of the preceding data, what are the estimated cash disbursements from operations for June 20X1?
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