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

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Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January.

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Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible.

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The cost of goods sold is 70% of sales.

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The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase.

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Other monthly expenses to be paid in cash are $24,600.

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Monthly depreciation is $17,000.

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Ignore taxes. $Carner Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regarding the store's operations follow: \bullet Sales are budgeted at $370,000 for November, $360,000 for December, and $340,000 for January. \bullet Collections are expected to be 85% in the month of sale, 13% in the month following the sale, and 2% uncollectible. \bullet The cost of goods sold is 70% of sales. \bullet The company purchases 30% of its merchandise in the month prior to the month of sale and 70% in the month of sale. Payment for merchandise is made in the month following the purchase. \bullet Other monthly expenses to be paid in cash are $24,600. \bullet Monthly depreciation is $17,000. \bullet Ignore taxes. -The cash balance at the end of December would be: A) $91,600 B) $205,500 C) $186,500 D) $19,000$
-The cash balance at the end of December would be:
A) $91,600
B) $205,500
C) $186,500
D) $19,000

The LFM Company Makes and Sells a Single Product, Product

Multiple Choice

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