Please show how you reached the answer (steps) Award: O out of 10.00 points Info

Question

Please show how you reached the answer (steps) Award: O out of 10.00 points Information pertaining to Yekstop Corp's sales revenue is presented below November December January Cash sales $96,000 $125,000 $78,000 Credit sales 88000 450.000 234.000 otal sales 84,00 Management estimates that 4% of credit sales are eventually uncollectible. Of the collecti credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the rmonth of purchase. Purchase costs are approximately 60% of the selling prices. Total budgeted inventory purchases in November by Yekstop Corp. are: $258,750 O $316.350. O $384,000 O $489,150 O $527.250.

Explanation / Answer

Answer : $527250

Explanation:

Total sale for november : $384000

Opening inventory of november = $384000 × 75% = $288000

Opening inventory on december = $575000× 75% = $431250

Opening inverntory of december = closing inventory of november

Therefore closing inventory of november = $431250

By using the following formula :

Sale = op. Inventory + purchase - cl. Inventory

$384000 = $288000 + purchase - $431250

Thus, purchase = $527250

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