Assume the following budgeted information for a merchandising company:

• Budgeted sales (all on credit) for November, December, and January are $257,000, $227,000, and $218,000, respectively.
• Cash collections related to credit sales are expected to be 75%in the month of sale, 25% in the month following the sale.
• The cost of goods sold is 70% of sales.
• Each month’s ending inventory equals 15% of next month’s cost of goods sold.
• 40% of each month’s merchandise purchases are paid in the current month and the remainder is paid in the following month.
• Monthly selling and administrative expenses that are paid in cash in the month incurred total $29,500.
• Monthly depreciation expense is $13,500.

The budgeted net operating income for December would be:

A) 29099

B) 38600

C) 42599

D) 25100

Answer rating: 100% (QA)

1 2 Q54 3 4 5 6 7 68 9 Less Less Less Sal... View the full answer