Serven Corporation has estimated its accrual-basis revenue and expenses for June 2017 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows: Sales: $700,000 Gross Profit (based on sales): 30% Increase in trade accounts recievable for the month: $20,000 Change in accounts payable during month: $0 Increase in inventory during month: $10,000 Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales. Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales. Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense. Required: On the basis of the preceding data, what are the estimated cash dispursements from operations for June?
Serven Corporation has estimated its accrual-basis revenue and expenses for June 2017 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows:
Sales: $700,000
Gross Profit (based on sales): 30%
Increase in trade accounts recievable for the month: $20,000
Change in accounts payable during month: $0
Increase in inventory during month: $10,000
Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales.
Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales.
Required:
On the basis of the preceding data, what are the estimated cash dispursements from operations for June?
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