Bramble Corp. reported the following information for 2016: October November December Budgeted sales $500000 $440000 $530000 Budgeted purchases $320000 $256000 $288000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Bramble purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Bramble receive during November? a.$485000 b.$220000 c.$470000 d.$440000

Question

Business

Dawson Barnes

1 September, 04:27

Bramble Corp. reported the following information for 2016: October November December Budgeted sales $500000 $440000 $530000 Budgeted purchases $320000 $256000 $288000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Bramble purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Bramble receive during November? a.$485000 b.$220000 c.$470000 d.$440000

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Answers (1)

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Gilbert Kidd · Answer 1

The correct answer is option (c).

Explanation:

According to the scenario, the computation of the given data are as follows:

Budget sales of October = $500,000

Budget sales of November = $440,000

So, we can calculate the cash that will receive in November by using following formula:

Cash receive in November = Credit Budget sales of October + Cash budget sales of November

= ($500,000 * 50%) + $440,000 * 50%)

= $250,000 + $220,000

= $470,000