Brarin Corporation is a small wholesaler of gourmet food products. Data regardin

Question

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

  

Sales are budgeted at $290,000 for November, $310,000 for December, and $300,000 for January.

Collections are expected to be 40% in the month of sale, 59% in the month following the sale, and 1% uncollectible.

The company would like to maintain ending merchandise inventories equal to 65% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.

  
Expected cash collections in December are:

Multiple Choice

$310,000

$295,100

$171,100

$124,000

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

Explanation / Answer

SOLUTION

Expected cash collections in December are: $295,100

Particulars Amount ($) November sales collected in December ($290,000*59%) 171,100 December sales ($310,000*40%) 124,000 Expected cash collections in December 295,100

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