The Dilly Company Marks Up All Merchandise at 25% of Gross

question 65

Multiple Choice

The Dilly Company marks up all merchandise at 25% of gross purchase price. All purchases are made on account with terms of 1/10, (1% discount if paid in 10 days) net/60 (full amount due within 60 days) . Purchase discounts, which are recorded as miscellaneous income, are always taken. Normally, 60% of each month's purchases are paid for in the first month after purchase, whereas the other 40% are paid during the first 10 days of the first month after purchase. Inventories of merchandise at the end of each month are kept at 30% of the next month's forecasted cost of goods sold.
Terms for sales on account are 2/10 (2% discount if paid within 10 days) , net/30 (full amount due in 30 days) . Cash sales are not subject to discount. Fifty percent of each month's sales on account are collected during the month of sale, 45% are collected in the succeeding month, and the remainder is usually uncollectible. Seventy percent of the collections in the month of sale are subject to discount, and 10% of the collections in the succeeding month are subject to discount (2%) .
Forecasted sales data and cost of sales for selected months are as follows: $\begin{array}{lrrr}&\text { Sales on }\\&\text { Account (Gross) }&\text { Cash Sales }&\text {Cost of Goods sold }\\\text { December } & \$ 1,900,000 & \$ 400,000 & \$ 1,840,000 \\\text { January } & 1,500,000 & 250,000 & 1,400,000 \\\text { February } & 1,700,000 & 350,000 & 1,640,000 \\\text { March } & 1,600,000 & 300,000 & 1,520,000\end{array}$


(Appendix 10A) Forecasted total collections from customers during February are:

• A) $1,875,000
• B) $1,861,750
• C) $1,511,750
• D) $1,188,100
• E) None of the above

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Definitions:

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Strategies or actions undertaken to modify social environments and relationships to improve health and wellbeing.

Structural Model

An abstract representation that illustrates the relationships between different variables and components within a specific phenomenon or system.

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Therapeutic approaches that involve family members in the treatment process to address and improve the mental health and relationships within the family.

Financial Burden

The stress or difficulty faced by an individual or family due to the costs of their living and expenses.