Carter Lumber sells lumber and general building supplies
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Use any data to answer the following question:
Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:
? Sales are budgeted at $XXX for November, $YYY for December, and $ZZZ for January.
? Collections are expected to be XX% in the month of sale, YY% in the month following the sale, and Z% uncollectible.
? The cost of goods sold is XX% of sales.
? The company purchases XX% of its merchandise in the month prior to the month of sale and YY% 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 $XXX.
? Monthly depreciation is $XXX.
? Ignore taxes.
Statement of Financial Position
October 31
Assets
Cash
Accounts receivable (net of allowance for uncollectible accounts)
Inventory
Property, plant and equipment (net of $XXX accumulated depreciation)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
a. The net income for December would be:
b. The cash balance at the end of December would be:
c. The accounts receivable balance, net of uncollectible accounts, at the end of December would be:
d. Accounts payable at the end of December would be:
e. Retained earnings at the end of December would be:
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Use any data to answer the following question:
Carter Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:
? Sales are budgeted at $20,000 for November, $35,000 for December, and $20,000 for January.
? Collections are expected to be 50% in the month of sale, 40% in the month following the sale, and 10% uncollectible.
? The cost of goods sold is 30% 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 $4,000.
? Monthly depreciation is $1,500.
? Ignore taxes.
Statement of Financial Position
October 31
Assets
Cash 15,500
Accounts receivable (net of allowance for uncollectible accounts) 2,150
Inventory 3,600
Property, plant and equipment ...
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