Master Budgeting-Review Bramble Corporation is a small wholesaler of gourmet foo
ID: 2512500 • 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 $$72,000 accumulated depreciation Total assets S 20,000 70,000 153,000 1,094,000 S 1,337,000 Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings $ 254,000 820,000 263,000 $ 1,337,000 Total liabilities and stockholders' equity 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 ofthe 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 $15,000 per month. There will be no change in common stock, and dividends will not be paid in November. .Explanation / Answer
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Balance Sheet not sure what period needed. Generally Balance sheet is at end of the period not FOR the period.
Schedule of Cash Collection November December Receivable as on 31st December Budgeted sales 500000 420000 A Cash Sales 30% 150000 126000 Credit Sales 70%: 350000 294000 B 60% in same month 210000 176400 C 40% Next Month 140000 117600 D Beginning Accounts Receivable 70000 A+B+C+D Total Cash Collection 430000 442400 Schedule of Cash Disbursment November December Accounts Payable as on 31st Dec Cost of Goods Sold 75% of Sale 375000 315000 Add: Closing Inventory 20% of Next Month COGS 63000 (From Balance Sheet Less: Opening Inventory 153000 63000 Purchase 285000 252000 Payment: A 25% Same Month 71250 63000 B 75% Next Month 213750 189000 C Beginning Acounts Payable 254000 A+B+C Total Cash Payment for Merchandise Pur 325250 276750 7. Cash Budget For November November Beginning Cash Balance 20000 Add: Cash Collection 430000 Availabel Cash 450000 Less: Cash paid for Merchandise Purchase 325250 Selling Admin Expense 80000-15000 65000 Total Cash Disbursment 390250 Closing Cash Balance 59750 8. Budgeted Income Statement For Nove Sale 500000 Less: COGS 375000 Gross Profit 125000 Less: Selling Admin Exp (Including Dep) 80000 Net Income 45000