Brarin Corporation is a small wholesaler of gourmet food products. Data regardin
ID: 2430949 • Letter: B
Question
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Sales are budgeted at $290,000 for November, $310,000 for December, and $300,000 for January.
Collections are expected to be 40% in the month of sale, 59% in the month following the sale, and 1% uncollectible.
The company would like to maintain ending merchandise inventories equal to 65% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
Expected cash collections in December are:
Multiple Choice
$310,000
$295,100
$171,100
$124,000
Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:
Explanation / Answer
SOLUTION
Expected cash collections in December are: $295,100
Particulars Amount ($) November sales collected in December ($290,000*59%) 171,100 December sales ($310,000*40%) 124,000 Expected cash collections in December 295,100