Kelita, Inc

question 85

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.
(Appendix 10A) What are the anticipated cash receipts for October?

• A)$-0-
• B)$40,000
• C)$47,500
• D)$66,500

Identify how gains or losses from non-cash assets realization are allocated among partners during liquidation.

Distinguish between the different types of contributions (capital and loans) and withdrawals (drawings) within a partnership.

Evaluate the impact of capital deficiencies on partnership liquidation and the subsequent obligations of partners.

Interpret partnership financial statements and capital statements to extract relevant financial information.

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Definitions:

Effective Offer

A proposal that meets all legal requirements and is presented in a manner that a reasonable person would understand its terms, triggering a potential contract.

Good Faith

The honest intention to act without taking an unfair advantage over another party in a transaction.

Reasonableness

The quality of being moderate, fair, and sensible in judgment or expectations, often evaluated in legal contexts.

Offeror's Intention

The specific intent by the person making an offer in a contract to be bound by the offer if it is accepted by the offeree.