Assume a merchandising company's estimated sales for January, February, and March are $107,000, $127,000, am $117,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 20% of its merchandise purch in the month of the purchase and the remaining 80% in the subsequent month. What are the cash disbursements merchandise purchases that would appear in the company's cash budget for February?

Assume a merchandising company's estimated sales for January, February, and March are $107,000, $127,000, am $117,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 20% of its merchandise purch in the month of the purchase and the remaining 80% in the subsequent month. What are the cash disbursements merchandise purchases that would appear in the company's cash budget for February?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 15PROB

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