The Gomez Company, a Merchandising Firm, Has Budgeted Its Activity

question 80

Multiple Choice

The Gomez Company, a merchandising firm, has budgeted its activity for December according to the following information:

• Sales at $500,000, all for cash.
• Merchandise Inventory on November 30 was $250,000.
• The cash balance at December 1 was $20,000.
• Selling and administrative expenses are budgeted at $50,000 for December and are paid for in cash.
• Budgeted depreciation for December is $30,000.
• The planned merchandise inventory on December 31 is $260,000.
• The cost of goods sold represents 75% of the selling price.
• All purchases are paid for in cash.
-The budgeted net income for December is:

• A)$75,000
• B)$45,000
• C)$125,000
• D)$65,000

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Definitions:

Core Principles

Fundamental beliefs or guidelines that serve as the foundation for a system, organization, or approach.

Honesty

The quality of being fair, truthful, and sincere in one's actions, communications, and business dealings.

Need Awareness Phase

The initial stage in the buying process where a potential customer recognizes they have a problem or need that could be satisfied by a product or service.