All sales are on credit accounts receivable are expected to

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Reference no: EM13483232

The MacArthur Company is a retail sporting goods store. Facts regarding their operation are as follows:

Sales are budgeted at $220,000 for November and $200,000 for December
All sales are on credit. Accounts receivable are expected to be collected 60% in the month of the sale, 38% in the month following the sale, and 2% are expected to be uncollectable.
The cost of goods sold is typically 75% of sales
Purchases of merchandise to be sold in the store are typically made 80% in the month prior to the sale and 20% in the month of the sale. Payment for purchases is made in the month following the purchase.
Other cash expenses amount to $22,600 per month
Depreciation expenses average $18,000 per month

MacArthur Company :Balance Sheet: As of October 31, 2013

Assets Liabilities

Cash $ 22,000 Accounts payable $ 162,000

Accounts receivable 80,000

Allowance for bad debts (4,000) Shareholders' equity

Inventory 132,000 Common stock 800,000

Fixed assets (at cost) 1,550,000 Retained earnings 138,000

Accumulated depreciation (680,000) Total liabilities and

Total Assets $ 1,100,000 shareholders' equity $ 1,100,000

Required:

1.Calculate the budgeted cash collections for November.

2.Calculate the budgeted Net Income for November.

3.Calculate the projected balance in accounts payable as of November 30.

4.Calculate the projected balance for inventory as of November 30.

Reference no: EM13483232

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