Information Pertaining to Yekstop Corp

question 53

Multiple Choice

Information pertaining to Yekstop Corp.'s sales revenue is presented below:Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.

Total budgeted inventory purchases in November by Yekstop Corp. are:

• A) $258,750.
• B) $316,350.
• C) $384,000.
• D) $489,150.
• E) $527,250.

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Definitions:

Financial Planning

The process of creating strategies to manage financial affairs and meet life goals, involving saving, investment, and budgeting.

Financing Needs

Refers to the amount of money required by a business or individual to fund current operations or future investments.

Investment Proposals

Plans or suggestions put forward for consideration to allocate resources in order to generate financial returns.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity and operational efficiency.