Quiz 06_Solution - 6A:130 Fall 2007 Quiz 6 QUIZ 6: is due...

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6A:130 – Fall 2007 Quiz 6 QUIZ 6: is due at beginning of class; Section 1 – Thursday, 11/08; Section 2 – Wednesday 11/07. To receive credit you must show your work . 1. ABC Co. budgeted its activity for January 2008 from the following information: Sales are budgeted at $750,000. All sales are credit sales and a monthly provision for doubtful is made at the rate of 2% of sales. Merchandise inventory was $120,000 at December 31, 2007, and an increase of $10,000 is planned for January, 2008. All merchandise is marked up to sell at invoice cost plus 50%. Estimated cash disbursements for selling and administrative expense for January 2008 are $105,000. Monthly depreciation expense is projected at $25,000. ABC Co. is projecting operating income for January 2008 in the amount of: $105,000 . Revenues - (COGS + Bad Debt Exp + + Deprec) = Oper. Inc 750,000 $ - [(750,000 / 1.5) + (750,000 x 2%) + 105,000 + 25,000] = 105,000 $ The following information applies to questions 2 and 3. XYZ Co. budgets on an annual basis for its fiscal year.
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Quiz 06_Solution - 6A:130 Fall 2007 Quiz 6 QUIZ 6: is due...

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