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# Managerial Accountings

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.

10. The cash balance at the end of December would be:
A) \$180,500
B) \$153,500
C) \$82,800
D) \$27,000

11. The accounts receivable balance, net of uncollectible accounts, at the end of December would be:
A) \$46,000
B) \$93,100
C) \$43,700
D) \$81,300

12. Accounts payable at the end of December would be:
A) \$81,900
B) \$141,700
C) \$59,800
D) \$149,500

13. Retained earnings at the end of December would be:
A) \$380,400
B) \$418,300
C) \$471,300
D) \$466,400

#### Solution Preview

10. The cash balance at the end of December would be:
A) \$180,500
B) \$153,500
C) \$82,800
D) \$27,000

A) \$180,500
11. The accounts ...

#### Solution Summary

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.

\$2.19