Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:
Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January.
Collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible.
The cost of goods sold is 80% of sales.
The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $21,700.
Monthly depreciation is $17,000.
Ignore taxes.
-The cost of December merchandise purchases would be:

Question

Dilom Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow:
 Sales are budgeted at $260,000 for November, $230,000 for December, and $210,000 for January.
  Collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible.
  The cost of goods sold is 80% of sales.
  The company purchases 50% of its merchandise in the month prior to the month of sale and 50% in the month of sale. Payment for merchandise is made in the month following the purchase.
  Other monthly expenses to be paid in cash are $21,700.
  Monthly depreciation is $17,000.
  Ignore taxes. 
-The cost of December merchandise purchases would be:

Quizplus · Accepted Answer

The cost of December merchandise purchases is $176,000.

Dilom Farm Supply Is Located in a Small Town in the Rural