Question

Assume a merchandising company's estimated sales for January, February, and March are $106,000, $126,000, and $116,000, respectively. Its cost of goods sold is always 35% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 25% of its merchandise purchases in the month of the purchase and the remaining 75% in the subsequent month. What are the cash disbursements for merchandise purchases that would appear in the company's cash budget for February? Multiple Choice $39,725 $41,725 $36,725 $42,725

          Assume a merchandising company's estimated sales for January, February, and March are $106,000, $126,000, and $116,000, respectively. Its cost of goods sold is always 35% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 25% of its merchandise purchases in the month of the purchase and the remaining 75% in the subsequent month. What are the cash disbursements for merchandise purchases that would appear in the company's cash budget for February?

Multiple Choice
$39,725
$41,725
$36,725
$42,725

Added by Juan Francisco B.

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