Question

Serven Corporation has estimated its accrual-basis revenue and expenses for June 2014 and would like your help in estimating cash disbursements. Selected data from these estimated amounts are as follows:
Sales .................... $700,000
Gross profit (based on sales) ............ 30%
Increase in trade accounts receivable for the month .. $ 20,000
Change in accounts payable during month ........ 0
Increase in inventory during month ........ $ 10,000

Variable selling, general, and administrative expenses include a charge for uncollectible accounts of 1% of sales.
Total selling, general, and administrative expenses are $71,000 per month plus 15% of sales.
Depreciation expense of $40,000 per month is included in fixed selling, general, and administrative expense.

Required:
On the basis of the preceding data, what are the estimated cash disbursements from operations for June?



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  • CreatedSeptember 10, 2014
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