Determine the following (1-3): 1. What is the expected cash collection in December? 2. What is the cost of the December merchandise purchases? 3. What is the December cash disbursements for merchandise purchases?
Determine the following (1-3): 1. What is the expected cash collection in December? 2. What is the cost of the December merchandise purchases? 3. What is the December cash disbursements for merchandise purchases?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Determine the following (1-3):
1. What is the expected cash collection in December?
2. What is the cost of the December merchandise purchases?
3. What is the December cash disbursements for merchandise purchases?
Transcribed Image Text:19-27 DY Farm Supply is located in a small town in the rural west. Data regarding the store's operations
follow:
●
●
●
●
●
Sales are budgeted at P290,000 for November, P310,000 for December, and P210,000 for January.
Collections are expected to be 65% in the month of sale, 33% in the month following the sale, and 2%
uncollectible.
The cost of goods sold is 80% of sales.
The company purchases 70% of its merchandise in the month prior to the month of sale and 30% in
the month of sale, Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are P21,100.
Monthly depreciation is P21,000.Ignoro taxos.
Statement of Financial Position
October 31
Assots:
Cash
Accounts receivable (net of allowance for uncollectible accounts)
Inventory
Property, plant and equipment (net of P624,000 accumulated depreciation)
Total assets
Liabilities and Stockholders' Equity:
Accounts payable
Common stock
Retained earnings
Total llabilities and stockholders' equity
P 25,000
77,000
162,400
1.026.000
P1.290.400
P 239,000
740,000
311.400
P1.290.400
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