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Carpon Lumber sells lumber and general building supplies to building contractors in

Carpon Lumber sells lumber and general building supplies to building contractors in

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 accounts receivable balance, net of uncollectible accounts, at the end of December would be: A)
$154,000 B) $157,500 C) $85,500 D) $303,600

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