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10-49 Budgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store that uses an accrual accounting syGOLDBERG COMPANY Statement of Financial Position November 30, 2019 Assets Cash $ 30,000 Accounts receivable (net of $4,000 al

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Answer #1
1 Total Budgeted cash collections:
Gross accounts receivable balance=76000+4000=$ 80000
This represents the balance 50% to be paid for the November sales (50% already paid in November)
Hence,November sales=80000/50%=$ 160000
Then,collected in December=160000*48%=$ 76800
December sales=$ 250000
Then,collected in December=250000*50%=$ 125000
2 Book value of accounts receivable at the end of December:
Accounts receivable (Gross)=50% of December month sales=250000*50%=$ 125000
Bad debts written off=November month sales*2%=160000*2%=$ 3200
Allowance for doubtful accounts at the end of December=Beginning balance-Bad debts written off=4000-3200=$ 800
Book value of accounts receivable at the end of December=Accounts receivable (Gross)-Allowance for doubtful accounts at the end of December=125000-800=$ 124200
3 Income (loss) before income taxes:
$ $
Gross margin
(Sales*30%) (250000*30%) 75000
Less:
Operating expenses 25000
Depreciation expense (216000/12) 18000 43000
Income (loss) before income taxes 32000
4 Projected balance in inventory on Dec 31,2019=Next month sales*80%=225000*80%=$ 180000
5 Budgeted purchases:
$
Sales 250000
Add: Projected ending inventory 180000
430000
Less:Beginning inventory 132000
Budgeted purchase 298000
6 Projected balance in accounts payable on Dec 31,2019=Budgeted purchase for December=$ 298000
(Since,payment for purchase made in the next month of purchase)
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