Information Pertaining to Yekstop Corp

Information pertaining to Yekstop Corp.'s sales revenue is presented below:Management estimates that 4% of credit sales are eventually uncollectible. Of the collectible credit sales, 65% are likely to be collected in the month of sale and the remainder in the month following the month of sale. The company desires to begin each month with an inventory equal to 75% of the sales projected for the month. All purchases of inventory are on open account; 30% will be paid in the month of purchase, and the remainder paid in the month following the month of purchase. Purchase costs are approximately 60% of the selling prices.

Total budgeted inventory purchases in December by Yekstop Corp. are:

A) $86,250.
B) $140,400.
C) $226,650.
D) $258,750.
E) $345,000.

Correct Answer:

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