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

question 119

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 will be the ending cash balance for January?

Definitions:

Association

In statistics, it refers to a relationship or linkage between two or more variables whereby they tend to vary together in a predictable manner.

Household Income

The combined gross income of all members of a household, typically measured annually.

Classification

The process of organizing or sorting items into categories based on their attributes or characteristics.

Sample Surveys

Research methods that collect data from a subset of a population to make inferences about the entire population.