Bramble Corporation is a small wholesaler of gourmet for products. Data regarding the store's operations follow:
• Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January.
• Collections are expected to be 80% in the month of sale and 20% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company would like to maintain ending merchandise inventories equal to 60% of the 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 $24,000.
• Monthly depreciation is $15,000.
• Ignore taxes.
Balance Sheet
October 31
Cash
Accounts receivable
Merchandise inventory
Property, plant and equipment, net of $572,000 accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Common stock
Retained earnings
Total liabilities and stockholders' equity
December cash disbursements for merchandise purchases would be:
$120,600
$248,000
$940,000
$856,500
$\ 20,000
70,000
153,000
1,094,000
$1,337,000
$ 254,000
$210,000
263,000
$1,337,000
