Western Supply is a western supplier. Western's operating data includes the following: • Sales are budgeted at $340,000
Posted: Thu May 19, 2022 2:06 pm
Western Supply is a western supplier. Western's operating data
includes the following:
• Sales are budgeted at $340,000 for November, $380,000 for
December, and $350,000 for January.
• Collections are expected to be 55% in the month of sale, 41% in
the month following the sale, and 4% uncollectible.
• The cost of goods sold is 78% of sales.
• Western must maintain ending merchandise inventories equal to 69%
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 $23,100.
• Monthly depreciation is $21,000.
• Ignore taxes.
Statement of Financial Position as of October 31:
Net Income for December is:
a.
$24,300.00
b.
$39,500.00
c.
$68,400.00
d.
$41,384.00
e.
$56,584.00
includes the following:
• Sales are budgeted at $340,000 for November, $380,000 for
December, and $350,000 for January.
• Collections are expected to be 55% in the month of sale, 41% in
the month following the sale, and 4% uncollectible.
• The cost of goods sold is 78% of sales.
• Western must maintain ending merchandise inventories equal to 69%
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 $23,100.
• Monthly depreciation is $21,000.
• Ignore taxes.
Statement of Financial Position as of October 31:
Net Income for December is:
a.
$24,300.00
b.
$39,500.00
c.
$68,400.00
d.
$41,384.00
e.
$56,584.00