Dilly Farm Supply is located in a small town in the rural west. Data regarding the...

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Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $251,000 for November, $291,000 for December, and $218,000 for January. • Collections are expected to be 60% in the month of sale and 40% in the month following the sale. • The cost of goods sold is 75% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 90% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $20,000. • Monthly depreciation is $25,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 26,000 Accounts receivable 81,000 Merchandise inventory 169,425 Property, plant and equipment, net of $624,000 accumulated depreciation 946,000 Total assets $ 1,222,425 Liabilities and Stockholders' Equity Accounts payable $ 247,000 Common stock 748,000 Retained earnings 227,425 Total liabilities and stockholders' equity $ 1,222,425 Retained earnings at the end of December would be: Multiple Choice $272,325 $227,425 $272,925 $251,925 Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Sales are budgeted at $251,000 for November, $291,000 for December, and $218,000 for January. • Collections are expected to be 60% in the month of sale and 40% in the month following the sale. • The cost of goods sold is 75% of sales. • The company desires to have an ending merchandise inventory at the end of each month equal to 90% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $20,000. • Monthly depreciation is $25,000. Ignore taxes. Balance Sheet October 31 Assets Cash $ 26,000 Accounts receivable 81,000 Merchandise inventory 169,425 Property, plant and equipment, net of $624,000 accumulated depreciation 946,000 Total assets $ 1,222,425 Liabilities and Stockholders' Equity Accounts payable $ 247,000 Common stock 748,000 Retained earnings 227,425 Total liabilities and stockholders' equity $ 1,222,425 Retained earnings at the end of December would be: Multiple Choice $272,325 $227,425 $272,925 $251,925

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Answers November December Sales 251000 291000 Less Cost of goods sold 18... View the full answer