Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store’s operation follow:
· Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. Sales in September were $330,000. Sales in October were $280,000.
· Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible.
· The cost of goods sold is 75% of sales.
· 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.
· Bramble will pay $25,000 in dividends in December.
· Bramble will purchase a truck in November. The truck is expected to cost $35,000.
· Bramble requires a minimum cash balance of $8,000.
· Ignore taxes. CLICK HERE FOR SOLUTION
Statement of Financial Position
October 31
Assets:
Cash………………………………………………………………………………………………………………………………….$ 20,000
Accounts receivable (net of allowance for uncollectable
Accounts)……………………………………………………………………………………………………………………………. 70,000
Inventory……………………………………………………………………………………………………………………………. 153,000
Property, plant and equipment (net of $572,000 accumulated
Depreciation)…………………………………………………………………………………………………………………….. 1,094,000
Total assets………………………………………………………………………………………………………………………… $1,337,000
Liabilities and Stockholders’ Equity:
Accounts payable………………………………………………………………………………………………………………..$ 254,000
Common stock……………………………………………………………………………………………………………………… 820,000
Retained earnings……………………………………………………………………………………………………………….. 263,000
Total liabilities and stockholders’ equity……………………………………………………………………………. $1,337,000
Prepare a cash budget for the month of NOVEMBER.
