Brarin Corporation is a small wholesaler of gourmet food pro

Brarin Corporation is a small wholesaler of gourmet food products. Data regarding the store\'s operations follow:

December cash disbursements for merchandise purchases would be:

A. $283,200

B. $196,000

C. $288,000

D. $282,400

The cost of December merchandise purchases would be:

A. $272,000

B. $288,000

C. $196,000

D. $282,400

The difference between cash receipts and cash disbursements in December would be:

A. $17,000

B. $24,300

C. $41,300

D. $65,600

Expected cash collections in December are:

A. $360,000

B. $149,600

C. $198,000

D. $347,600

Statement of Financial Position October 31 ssets Cash Accounts receivable (net of allowance for uncollectible accounts) Merchandise inventory Propcrty, plant and cquipment (net of $452,000 accumulated depreciation)... Total asscts $ 22,000 77,000 190,400 934,000 81,223.400 Liabilities and Stockholders Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders\' equity $ 281,000 620,000 322.400 $1223,400

Solution

PURCHASE BUDGET Nov Dec Jan Budgeted Sales $ 340,000 360,000 350,000 Budgeted Cost of Goods sold @80% 272,000 288,000 280,000 Add: Desired Ending Inventory 201,600 196,000 Total needs 473,600 484,000 Less: Beginning Inventory 190,400 201,600 Purchase in $ 283,200 282,400 Req 1: Answer is A. $ 283200 Purchase of Nov paid in December. Req 2: Answer is D. $ 282400 Req 3: Answer is C 41300 Explanation: Difference =347600-283200-23100 = $ 41300 Req 4: Answer is D. $347600 Explanation: Cash collection of december: Nov salles (340000*44%) 149600 dec Sales (360000*55%) 198000 Total collections 347600