The following budgeted information is collected for a merchandising company: • Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. Cash collections of sales are expected to be 75% in the month of sale and 23% in the month following the sale. • The remainder of the sales is expected to be uncollectible. · The cost of goods sold is always 65% of sales. · Each month's ending inventory equals 20% of next month's cost of goods sold. • 40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500. • Monthly depreciation expense is $20,000. • Dividends of $5,000 to be declared in December and paid in Janauary. Use the above information to answer the following FIVE questions. The expected cash collections from customers in December are:

The following budgeted information is collected for a merchandising company: • Budgeted sales (all on credit) for November, December, and January are $250,000, $220,000, and $200,000, respectively. Cash collections of sales are expected to be 75% in the month of sale and 23% in the month following the sale. • The remainder of the sales is expected to be uncollectible. · The cost of goods sold is always 65% of sales. · Each month's ending inventory equals 20% of next month's cost of goods sold. • 40% of each month's merchandise purchases are paid in the current month and the remainder is paid in the following month. • Monthly selling and administrative expenses that are paid in cash in the month incurred total $20,500. • Monthly depreciation expense is $20,000. • Dividends of $5,000 to be declared in December and paid in Janauary. Use the above information to answer the following FIVE questions. The expected cash collections from customers in December are:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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