Assume the following budgeted information for a merchandising company:- **Budgeted sales (all on credit)** for November, December, and January are $248,000, $218,000, and $209,000, respectively.- **Cash collections** related to credit sales are expected to be 70% in the month of sale, 30% in the month following the sale.- The **cost of goods sold** is 70% of sales.- Each month's ending inventory equals 20% of next month's cost of goods sold.- **30% 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 $25,000.- **Monthly depreciation expense** is $9,000.The budgeted net operating income for December would be:### Multiple Choice- ○ $40,400- ○ $25,734- ○ $16,734- ○ $31,400This information provides a comprehensive view of the financial operations expected for the company during the given months, allowing for analysis of cash flow, cost of sales, and budgeted income.

udgeted sales (all on credit) for November, December ash collections related to credit sales are expected to he cost of goods sold is 70% of sales. ach month's ending inventory equals 20% of next mo 0% of each month's merchandise purchases are paid Monthly selling and administrative expenses that are pr Monthly depreciation expense is $9.000.

udgeted sales (all on credit) for November, December ash collections related to credit sales are expected to he cost of goods sold is 70% of sales. ach month's ending inventory equals 20% of next mo 0% of each month's merchandise purchases are paid Monthly selling and administrative expenses that are pr Monthly depreciation expense is $9.000.

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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A Company has the following sales 2,000 in January, 2,200 in February, 2,800 in April and 3,000 in May. Assuming the selling prices is P100/unit. Sales for each month are expected to be collected as follows: • Month of sales: 20% • A month after sales: 50% • 2 months after sales: 30% - How much is total receipts from sales? Feb Total 12, 500 P1,250,000 P250,000 Jan Мar Apr May Units Sold Sales in Pesos Collection from months sales current Collection months sales Collection from two months from previous P150,000 P84,000 sales Total Collections from Sales 40,000 P926,000
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Rmn.2
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