What the cost of december merchandise purchases would be

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Reference no: EM132957473

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

  • Sales are budgeted at $350,000 for November, $330,000 for December, and $320,000 for January.
  • Collections are expected to be 45% in the month of sale and 55% in the month following the sale.
  • The cost of goods sold is 75% of sales.
  • The company would like to maintain ending merchandise inventories equal to 80% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
  • Other monthly expenses to be paid in cash are $24,100.
  • Monthly depreciation is $15,100.

Ignore taxes.

Balance Sheet

October 31 Assets

Cash $20,100

Accounts receivable 70,100

Merchandise inventory 210,000

Property, plant and equipment, net of $572,100

Accumulated depreciation 1,094,100

Total assets $1,394,300

Liabilities and Stockholders'

Equity Accounts payable $254,100

Common stock 820,100

Retained earnings 320,100

Total liabilities and stockholders' equity $1,394,300

Problem 1: The cost of December merchandise purchases would be

Reference no: EM132957473

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