15 September, 17:16

# Bramble Corp. reported the following information for 2016: October November December Budgeted sales \$500000 \$440000 \$530000 Budgeted purchases \$320000 \$256000 \$288000 All sales are on credit. Customer amounts on account are collected 50% in the month of sale and 50% in the following month. Cost of goods sold is 35% of sales. Bramble purchases and pays for merchandise 60% in the month of acquisition and 40% in the following month. Accounts payable is used only for inventory acquisitions. How much cash will Bramble receive during November? a.\$485000 b.\$220000 c.\$470000 d.\$440000

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1. 15 September, 20:08
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The correct answer is option (c).

Explanation:

According to the scenario, the computation of the given data are as follows:

Budget sales of October = \$500,000

Budget sales of November = \$440,000

So, we can calculate the cash that will receive in November by using following formula:

Cash receive in November = Credit Budget sales of October + Cash budget sales of November

= (\$500,000 * 50%) + \$440,000 * 50%)

= \$250,000 + \$220,000

= \$470,000