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Business, 11.11.2019 21:31 davidleew24

The next three questions are based on the following information: copland supplies company is a retail store that purchases merchandizes from several makers of office equipment. actual balance sheet is presented below: balance sheet as of september 30, 2018 cash $25,000 accounts receivable (net of allowance for uncollectible accounts) $70,000 $79,625 $1,225,375 inventory property plant equipment (net of $640,000 accumulated depreciation) total assets accounts payable common stock retained earnings total liabilities and stockholders' equity $1,400,000 $170,000 $1,050,000 $180,000 $1,400,000 | to prepare budgets, the budget officer gathered addition budget data: sales are budgeted at $350,000, $260,000, and $230,000, all on credit, for october, november, and december, respectively.

• the company will declare $15,000 dividend in october, which will be paid in november.
• collections are expected to be 55% in the month of sale, 40% in the month following the sale, and 5% uncollectible. copland supplies recognizes bad debt expenses in the month sales are made.
• the cost of goods sold is 65% of sales.
• the ending merchandise inventory should be 35% of the following month sales needs.
• payment for merchandise purchases is expected to be 60% in the month of purchase with the remaining paid in the following month.
• monthly selling and administrative expenses to be paid in cash are $32,000.
• monthly depreciation is $20,000.

in addition to the information given above, assume copland supplies requires $30,000 minimum cash balance. cash can be borrowed at any exact amount at the beginning of each month from company's credit line at a local bank. interest, 2% monthly, are paid at the end of each month. determine total amount of cash copland supplies needs to borrow from the bank for the month october:

a. $68,715
b. $38,715
c. $30,000
d $70,118
e. none of the above

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