The Bandeiras Corporation, a merchandising firm, has budgeted its activity for D

ID: 2552062 • Letter: T

Question

The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:

Sales at $550,000, all for cash.

Merchandise inventory on November 30 was $300,000.

The cash balance at December 1 was $25,000.

Selling and administrative expenses are budgeted at $60,000 for December and are paid in cash.

Budgeted depreciation for December is $35,000.

The planned merchandise inventory on December 31 is $270,000.

The cost of goods sold is 75% of the sales price.

All purchases are paid for in cash.

There is no interest expense or income tax expense.

The budgeted cash disbursements for December are:

Budgeted purchases for December=(550000*75%)+270000-300000= $382500 The budgeted cash disbursements for December=382500+60000= $442500

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