Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:Sales are budgeted at $370,000 for November, $350,000 for December, and $340,000 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 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 $24,300.
Monthly depreciation is $15,300.
Ignore taxes.
Balance SheetOctober 31Assets Cash$20,300?Accounts receivable 70,300?Merchandise inventory 155,400?Property, plant and equipment, net of $572,300 accumulated depreciation 1,094,300?Total assets$1,340,300? Liabilities and Stockholders' Equity Accounts payable$254,300?Common stock 820,300?Retained earnings 265,700?Total liabilities and stockholders' equity$1,340,300??The difference between cash receipts and cash disbursements for December would be:
A. $63,075
B. $39,400
C. $127,600
D. $84,100
Answer: D
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