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Data regarding store operations

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Reference no: EM13145863

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:


• Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January.

• Collections are expected to be 65% in the month of sale, 33% in the month following the sale, and 2% uncollectible.

• The cost of goods sold is 80% of sales.

• The company purchases 70% of its merchandise in the month prior to the month of sale and 30% 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 $21,100.

• Monthly depreciation is $21,000.

• Ignore taxes.

The excess (deficiency) of cash available over disbursements for December would be:

a. $46,600

b. $19,200

c. $13,700

d. $32,900

Reference no: EM13145863

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