Question

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow • Sales are budgeted at $320,000 for November, $300,000 for December, and $290,000 for January • Collections are expected to be 55% in the month of sale and 45% in the month following the sale. • The cost of goods sold is 70% of sales. • The company would like to maintain ending merchandise inventories equal to 70% 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 $23,800. • Monthly depreciation is $14,800. • Ignore taxes. Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $573,400 accumulated depreciation Total assets $ 21,400 71,400 156,800 1,095,400 $1,345,000 Liabilities and Stockholders' Equity

Answer 1

Calculate expected cash collection

Expected cash collection = (300000*55%+320000*45%) = 309000

So answer is d) $309000