The Gomez Company, a merchandising firm, has budgeted its activity for December

Question

The Gomez Company, a merchandising firm, has budgeted its activity for December according to the following information

• Sales at $680,000, all for cash.
• Merchandise Inventory on November 30 was $340,000.
• The cash balance at December 1 was $38,000.
• Selling and administrative expenses are budgeted at $46,000 for December and are paid for in cash.
• Budgeted depreciation for December is $33,000.
• The planned merchandise inventory on December 31 is $353,000.
• The cost of goods sold represents 62% of the selling price.
• All purchases are paid for in cash.

The budgeted cash disbursements for December are:

$513,600

$480,600

$467,600 <-- I got this one

$434,600

Explanation / Answer

The budgeted cash disbursements for December are=434600+46000=$480600

Cash Budget Opening Balance As on 1st Dec 38000 ADD Cash Sales 680000 718000 Less Cash Purchases 434600 Less Selling and administrative expenses 46000 Closing Balance As on 31st Dec 237400

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