(Appendix 10A) Gold Company Has the Following Balances at December

question 11

Multiple Choice

(Appendix 10A) Gold Company has the following balances at December 31, 20x4: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December) ; merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only) . Budgeted sales follow: $$\begin{array} { l r } \text { January } & \$ 50,000 \\\text { February } & 90,000 \\\text { March } & 60,000 \\\text { April } & 100,000\end{array}$$ Other data:
*Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales.
*Cost of goods sold is 40% of sales.
*Ending inventory must be 140% of the next month's cost of sales.
*Purchases are paid 70% in month of purchase and 30% in the following month.
*The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for amortization.
*All costs are paid in the month incurred.
*Minimum cash balance requirement is $6,000.
The cash disbursements for purchases in March are:

• A) $46,400
• B) $32,480
• C) $38,240
• D) $48,720

Understand the importance and characteristics of relevant financial information.

Recognize the impact of mispriced securities and the role of financial statements in identifying them.

Grasp the significance of consistent accounting methods for faithful representation of financial information.

Appreciate the necessity of comparability in financial statements for accurate economic analysis.

---

Definitions:

Need For Cognition

A personality trait that denotes a person’s tendency to engage in and enjoy effortful cognitive activities.

Need For Cognition

A psychological trait that describes an individual's tendency to engage in and enjoy effortful cognitive activities and thinking.

Self-Esteem

Someone's self-assessment of their worth.

Promotion Focus

A motivational state where individuals are oriented towards achieving positive outcomes and aspirations.