(Appendix 10A)Gold Company Has the Following Balances at December 31

question 56

Multiple Choice

(Appendix 10A) Gold Company has the following balances at December 31, 20x0: Cash $6,000; accounts receivable $34,000 ($10,000 from November and $24,000 from December) ; merchandise inventory $40,000; and accounts payable $20,000 (for merchandise purchases only) . Budgeted sales follow: January $ 50,000
February 90,000
March 60,000
April 100,000
Other data:
*Sales are 40% cash, 50% collected during the following month, and 10% collected during the second month after sale. A 3% cash discount is given on cash sales
*Cost of goods sold is 40% of sales
*Ending inventory must be 140% of the next month's cost of sales
*Purchases are paid 70% in month of purchase and 30% in the following month
*The selling and administrative cost function is: $6,000 + $0.2 × sales. This includes $1,000 for amortization
*All costs are paid in the month incurred
*Minimum cash balance requirement is $6,000
What is the budgeted cost of purchases for February?

• A)$19,200
• B)$30,400
• C)$15,000
• D)$52,800

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Definitions:

Follow-up

The act of making further communications or actions to ensure the completion of a task, maintain contact, or evaluate satisfaction after an initial meeting or transaction.

Building Materials

Materials used in the construction of buildings, such as wood, concrete, steel, and bricks, designed to meet various structural and aesthetic requirements.

Long-term Relationships

The development and maintenance of ongoing, cooperative partnerships between individuals or organizations over an extended period.

Service Quality

The assessment of how well a delivered service matches the customer's expectations.