Use the Following Information for the Next 4 Questions

question 49

Multiple Choice

Use the following information for the next 4 questions.
(CPA) 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 good 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:
-Forecasted ending inventory for the month of December is

• A) $420,000
• B) $441,600
• C) $552,000
• D) $395,750
• E) None of the above

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Definitions:

Lasted Many Years

This phrase typically describes events, relationships, or situations that have continued or endured for an extended period of time.

Autonomy

The capacity and right of individuals to make their own choices and decisions independently, often associated with self-determination and freedom.

Private Property

Land or belongings owned by individuals or entities, not by the government or public.

Costs

Costs refer to the expenses incurred in the production of goods or the delivery of services, or the sacrifices made in engaging in an activity.