Kelita, Inc

question 15

Multiple Choice

Kelita, Inc., projects sales for its first three months of operation as follows: October November December
Credit sales $100,000 $150,000 $200,000
Cash sales 40,000 60,000 50,000
Total Sales $140,000 $210,000 $250,000
Inventory on October 1 is $40,000. Subsequent beginning inventories should be 40% of that month's cost of goods sold. Goods are priced at 140% of their cost. 50% of purchases are paid for in the month of purchase; the balance is paid in the following month. It is expected that 50% of credit sales will be collected in the month following sale, 30% in the second month following the sale, and the balance the third month. A 5% discount is given if payment is received in the month following sale.
What is the projected cost of purchases for October?

• A)$80,000
• B)$93,333
• C)$120,000
• D)$180,000

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Definitions:

Traits Evolve

The process by which characteristics or traits of organisms change over generations through natural selection and genetic drift.

Species Survive

The ability of a species to continue existence and avoid extinction by adapting to environmental changes or overcoming threats.

Uniformitarianism

The idea that the natural laws observable around us now are also responsible for events in the past. One part of this view, for example, is the idea that Earth has been shaped by the cumulative action of gradual processes like sediment deposition and erosion.

Natural Laws

Fundamental physical laws that govern the behavior and structure of the natural universe.