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Carter Lumber sells lumber and general building supplies

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:

Solution Preview

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 ...

Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment of more than 500 words of text.

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