Carpon Lumber Sells Lumber and General Building Supplies to Building

question 2

Multiple Choice

Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow:

• Sales are budgeted at $340,000 for November, $350,000 for December, and $370,000 for January.
• Collections are expected to be 55% in the month of sale, 44% in the month following the sale, and 1% uncollectible.
• The cost of goods sold is 75% of sales.
• The company desires to have an ending merchandise inventory equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $21,100.
• Monthly depreciation is $19,000.
• Ignore taxes.

-The cash balance at the end of December would be:

• A)$13,000
• B)$52,400
• C)$65,400
• D)$74,500

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Definitions:

Continental Crust

The relatively thick part of the Earth's crust that forms the large landmasses. It is generally older, less dense, and composed mainly of granite.

Plate Boundary

Boundaries at the junction of two tectonic plates, frequently linked with earthquakes and volcanic actions.

Appalachian Mountains

A major mountain range in eastern North America, extending from the Canadian Maritime provinces to central Alabama in the United States.

Thrust Faulting

A type of faulting caused by compressional forces where older layers of rock are pushed up and over younger layers.