Dilly Farm Supply is located in a small town in the rural west. Data related to store
Question:
Dilly Farm Supply is located in a small town in the rural west. Data related to store operations is as follows:
Sales are budgeted at $290,000 for November,
$310,000 for December, and
$210,000 for January.
Collections are expected to be 65% in the month of sale and 35% in the month following the sale.
The cost of goods sold is 80% of sales.
The company wants to have ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold.
Payment for the merchandise is made in the month following the purchase.
Other monthly expenses to be paid in cash are $21,100.
Monthly depreciation is $21,000. Ignore taxes.
Balance sheet as of October 31
Assets
Cash $25,000
Accounts receivable 77,000
Merchandise inventory 162,400
Property, plant and equipment, $624,000
net of accumulated depreciation 1,026,000
Total assets $1,290,400
Liabilities and shareholders' equity
Accounts payable $239,000
Capital stock 740,000
Total of passive and
Retained earnings 311.40
Equity $ 1,290,400
What would be the Accounts payable at the end of December ?