Master Budgeting- Review Bramble Corporation is a small wholesaler of gourmet fo
ID: 2512484 • Letter: M
Question
Master Budgeting- Review Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets S 20,000 70,000 153,000 1,094,000 S 1,337000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity S 254,000 820,000 263,000 S 1,337000 Sales are budgeted at $500,000 for November and $420,000 for December. Cash sales are expected to be 30% of total sales for each month. The remaining sales will be on credit and Bramble expects to received 60% of credit sales in the month of the sale and 40% in the month following the sale. All of the accounts receivable as of October 31 will be collected in November. The cost of goods sold is 75% of sales. The company would like to maintain ending merchandise inventories equal to 20% of the next month's cost of goods sold. Bramble expects to pay 25% in the month of purchase and 75% in the following month. Account payable as of October 31 will be paid in November. . Selling and administrative expenses are $80,000. This amount includes depreciation of S15,000 per month. There will be no change in common stock, and dividends will not be paid in November. Required: 1. How much cash will be collected in November? 2. What is the amount of accounts receivable as of November 30. 3. What is the dollar amount of inventory that must be purchased in November? 4. How much cash will be paid for purchases in November? 5. What is the amount of accounts payable as of November 30 6. How much cash will be paid for selling and administrative expenses in November? 7. Prepare a cash budget for November. 7. Prepare a budgeted income statement for November 8. Prepare a budgeted balance sheet for December.Explanation / Answer
1. Cash collections during november = (500000*30%)+(500000*70%*60%)+70000 = $430000
2.Account receivale as on November 30 = 500000*70%*40% = $140000
3. Amount of inventory = (500000*75%)+(420000*75%*20) = $438000
4. Cash paid for purchases = (254000)+(25%*438000) = $363500
I have answered first 4 questions as per the policy of Chegg