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Use the Following Information for the Next 4 Questions

question 114

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 total collections from customers during February are

Definitions:

Exchange Rates

The value of one currency expressed in terms of another currency, used in international trade and investment.

Nominal Currency Values

The face value of currency without taking into account inflation or the purchasing power of the currency.

Purchasing Power

The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy, often impacted by inflation.

Fixed Exchange Rates

A currency system where the value of a country's currency is pegged at a fixed rate to another currency or a basket of currencies, making it stable against those currencies.