Gold Company has the following balances at 31^st December 31 2010: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December) ; merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only) . Budgeted sales follow: Other data:
· Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales
· Cost of goods sold is 40% of sales
· Ending inventory must be 140% of the next month's cost of sales
· Purchases are paid 70% in month of purchase and 30% in the following month
· The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for depreciation
· All costs are paid in the month incurred
· Minimum cash balance requirement is $6,000
What is the budgeted cost of purchases for February?

Question

Gold Company has the following balances at 31^st December 31 2010: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December) ; merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only) . Budgeted sales follow:

Gold Company has the following balances at 31<sup>st</sup> December 31 2010: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December) ; merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only) . Budgeted sales follow: Other data: · Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales · Cost of goods sold is 40% of sales · Ending inventory must be 140% of the next month's cost of sales · Purchases are paid 70% in month of purchase and 30% in the following month · The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for depreciation · All costs are paid in the month incurred · Minimum cash balance requirement is $6,000 What is the budgeted cost of purchases for February? A) $19,200 B) $30,400 C) $15,000 D) $52,800

Other data:
· Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales
· Cost of goods sold is 40% of sales
· Ending inventory must be 140% of the next month's cost of sales
· Purchases are paid 70% in month of purchase and 30% in the following month
· The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for depreciation
· All costs are paid in the month incurred
· Minimum cash balance requirement is $6,000
What is the budgeted cost of purchases for February?

Quizplus · Accepted Answer

The Answer of Gold Company has the following balances at 31^st December 31 2010: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December); merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only). Budgeted sales follow: Other data: · Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales · Cost of goods sold is 40% of sales · Ending inventory must be 140% of the next month's cost of sales · Purchases are paid 70% in month of purchase and 30% in the following month · The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for depreciation · All costs are paid in the month incurred · Minimum cash balance requirement is $6,000 What is the budgeted cost of purchases for February? A) $19,200 B) $30,400 C) $15,000 D) $52,800

Gold Company Has the Following Balances at 31st December 31

Gold Company Has the Following Balances at 31^st December 31