it View History Bookmarks Window Help ??, 75% town in the rural west. Data m Exa

Question

it View History Bookmarks Window Help ??, 75% town in the rural west. Data m Exam (Ch.1-8 except 4) Saved Help Save& Exit Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow . Sales are budgeted at $248,000 for November, $288,000 for December, and $220,000 for January Collections are expected to be 60% in the month of sale and 40% in the month following the sale. The cost of goods sold is 75% of sales The company desires to have an ending merchandise inventory at the end of each month equal to 70% 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 $17,500 Monthly depreciation is $20.000. ignore taxes * Balance Sheet October 31 Assets Cash Accounts receivable Merchandise inventory Property, plant and equipment, net of $624,000 accumulated depreciation Total assets 20,000 79,500 130,200 976, 000 $1,205,700 Liabilities and stockholders' Equity

Explanation / Answer

Accounts payable at December 31:

= Sales of January×Cost of goods sold %×Ending inventory %

= $220,000×75%×70%

= $115,500

Hence, correct option is $115,500.

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