Bramble Corporation is a small wholesaler of gourmet food 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 SheetOctober 31Assets Cash$20,000Accounts receivable 70,000Merchandise inventory 153,000Property, plant and equipment,
net of $572,000 accumulated depreciation 1,094,000Total assets$1,337,000 Liabilities and Stockholders' Equity Accounts payable$254,000Common stock 820,000Retained earnings 263,000Total liabilities and stockholders' equity$1,337,000?The cost of December merchandise purchases would be:
A. $139,500
B. $235,500
C. $240,000
D. $255,000
Answer: B
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The pursuit of organizational goals efficiently and effectively by integrating the work of people through planning, organizing, leading, and controlling the organization's resources is called
A. employment. B. career planning. C. competitive advantage. D. management. E. strategic planning.
Alpha Company uses its sales invoices for posting perpetual inventory records. Inadequate control activities over the invoicing function allow goods to be shipped that are not invoiced. The inadequate control activities could cause an:
A. overstatement of revenues and receivables and an understatement of inventory. B. understatement of revenues, receivables, and inventory. C. overstatement of revenues, receivables, and inventory. D. understatement of revenues and receivables and an overstatement of inventory.
Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $20,162. Franklin's August bank statement shows $19,837 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit$6600?Outstanding checks$5300?Bank service fees, not yet recorded by company$120?The bank collected on a note receivable, not yet recorded by the company$1095?The adjusted cash balance should be:
A. $26,437 B. $20,042 C. $21,257 D. $21,137 E. $14,537.
Hull Company reported the following income statement information for the current year: Sales$410,000 Cost of goods sold: Beginning inventory$132,000 Cost of goods purchased 273,000 Cost of goods available for sale 405,000 Ending inventory 144,000 Cost of goods sold 261,000 Gross profit$149,000 The beginning inventory balance is correct. However, the ending inventory figure was overstated by $20,000. Given this information, the correct gross profit would be:
A. $149,000. B. $142,000. C. $129,000. D. $169,000. E. $112,000.