Managerial Accountings
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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.
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
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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.
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 ...
Purchase this Solution
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