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# An expert response to managerial accounting

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Dilbert Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:

- Sales are budgeted at \$260,000 for November, \$230,000 for December, and \$210,000 for January.
- Collections are expected to be 80% in the month of sale, 19% in the month following the sale, and 1% uncollectible.
- The cost of goods sold is 65% of sales.
- The company purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. Payment for merchandise is made in the month following the purchase.
- Other monthly expenses to be paid in cash are \$20,300.
- Monthly depreciation is \$20,000.
- Ignore taxes.

#### Solution Preview

46. Expected cash collections in December are:
A) \$230,000
B) \$184,000
C) \$233,400
D) \$49,400

=230000*80%+260000*19%=233400
47. The cost of ...

#### Solution Summary

This solution gives calculations for expected cash, cost of purchases, cash disbursements, and excess (deficiency) of cash.

\$2.49