Bonkowski Corporation Makes One Product and Has Provided the Following

question 217

Multiple Choice

Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:
Credit sales are collected:
30% in the month of the sale
70% in the following month
Raw materials purchases are paid:
30% in the month of purchase
70% in the following month
The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following month's raw materials production needs.
-The estimated net operating income (loss) for February is closest to:

• A) $85,000
• B) $48,800
• C) $118,800
• D) $86,000

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Definitions:

Consent

Agreement or permission given by a person with full knowledge of the risks involved and the implications of their decisions.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

UPA

Uniform Partnership Act, which governs the operation of partnerships within the United States.

Legal Entity

A legal entity is any company or organization that has legal rights and responsibilities, including the ability to enter into contracts, sue, and be sued.