Chapter 8. Quiz Help Save & E 5 TB MC Qu. 8-119 Bramble Corporation is a small w

Question

Chapter 8. Quiz Help Save & E 5 TB MC Qu. 8-119 Bramble Corporation is a small wholesaler... Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow 2 points - Sales are budgeted at $310,000 for November, $290,000 for December, and $280,000 for January ons are expected to be 60% in the month of sale and 40% in the month following the sale . The cost or goods sold is 65% of sales. . The company would like maintain ending merchandise in ventones equal to 55%ofthe 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 $23,70o. . Monthly depreciation is $14,700. . ignore taxes. lance Sheet October 31 S21.500 Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $573, 500 accumulated depreciation 110, 825 DELL

Explanation / Answer

Solution: December Merchandise Purchase:

In December the company will pay for November's purchases of $194,350

Particulars November ($) December ($) Sales 310,000 290,000 COGS(65% of sales) 201,500 188,500 Add: Desired merchandise ending inventory (55%*188500) 103,675 Total needs 305,175 Less: Beginning merchandise inventory (55%*201500) 110,825 Required purchases 194,350

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