Answer the Following Questions Using the Information Below

Answer the following questions using the information below:
The following information pertains to the January operating budget for Casey Corporation.
• Budgeted sales for January $200,000 and February $100,000.
• Collections for sales are 60% in the month of sale and 40% the next month.
• Gross margin is 30% of sales.
• Administrative costs are $10,000 each month.
• Beginning accounts receivable is $20,000.
• Beginning inventory is $14,000.
• Beginning accounts payable is $65,000. (All from inventory purchases.)
• Purchases are paid in full the following month.
• Desired ending inventory is 20% of next month's cost of goods sold (COGS) .
-For January,budgeted net income is ________.

A) $60,000
B) $50,000
C) $40,000
D) $30,000

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free