Answer:
1.)
Cash Collections for December = Accounts Receivable + 50% *
December Sales
Cash Collections for December = $76,000 + 50% * $330,000
Cash Collections for December = $76,000 + $165,000
Cash Collections for December = $241,000
2.)
Bad Debt Expense for December = 2% * December Sales
Bad Debt Expense for December = 2% * $330,000
Bad Debt Expense for December = $6,600
Accounts Receivable at the End of December = 48% * December
Sales
Accounts Receivable at the End of December = 48% * $330,000
Accounts Receivable at the End of December = $158,400
3.)
December Gross Profit = 30% * December Sales
December Gross Profit = 30% * $330,000
December Gross Profit = $99,000
4.)
Income before Taxes for December = Gross Profit - Bad Debt Expense
- Other Cash Operating Expense - Depreciation
Income before Taxes for December = $99,000 - $6,600 - $26,400 -
$19,500
Income before Taxes for December = $46,500
.
5.)
Budgeted Ending Inventory for December = 80% * January Sales
Budgeted Ending Inventory for December = 80% * $300,000
Budgeted Ending Inventory for December = $240,000
5.)
Budgeted Purchases for December = Budgeted Sales + Budgeted Ending
Inventory - Beginning Inventory
Budgeted Purchases for December = $330,000 + $240,000 -
$184,800
Budgeted Purchases for December = $385,200
6.)
Accounts Payable at the End of December = Budgeted Purchases
Accounts Payable at the End of December = $385,200
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