Skip to question KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given. May (actual) June (budget) July (budget) Sales $55,000 $56,000 $55,500 Cost of sales $32,000 $33,500 $32,000 Gross margin $23,000 $22,500 $23,500 Operating expenses $18,000 $18,000 $18,000 Operating income $5,000 $4,500 $5,500 Sales are collected 70% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale. What should be the cash disbursements during the month of June for goods purchased for resale and for operating expenses?
Skip to question KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given. May (actual) June (budget) July (budget) Sales $55,000 $56,000 $55,500 Cost of sales $32,000 $33,500 $32,000 Gross margin $23,000 $22,500 $23,500 Operating expenses $18,000 $18,000 $18,000 Operating income $5,000 $4,500 $5,500 Sales are collected 70% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale. What should be the cash disbursements during the month of June for goods purchased for resale and for operating expenses?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Skip to question
Sales are collected 70% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale.
KAB Inc., a small retail store, had the following results for May. The budgets for June and July are also given.
| May (actual) | June (budget) | July (budget) | |
| Sales | $55,000 | $56,000 | $55,500 |
| Cost of sales | $32,000 | $33,500 | $32,000 |
| Gross margin | $23,000 | $22,500 | $23,500 |
| Operating expenses | $18,000 | $18,000 | $18,000 |
| Operating income | $5,000 | $4,500 | $5,500 |
Sales are collected 70% in the month of the sale and the balance in the month following the sale. (There are no bad debts.) The goods that are sold are purchased in the month prior to sale. Suppliers of the goods are paid in the month following the purchase. The operating expenses are paid in the month of the sale.
What should be the cash disbursements during the month of June for goods purchased for resale and for operating expenses?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education