1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000...
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1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000 $40,000 March $100,000 $56,000 Cash is collected from customers in the following manner: - Month of sale 30% - Month following the sale 70% 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labour costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. a. How much cash will be collected from customers in March? (5%) b. How much cash will be paid to suppliers in March? (5%) C. How much cash will be disbursed in total in March? (5%) d. What is the ending cash balance for March after borrowing, if required? (5%) e. What are two advantages of budgets (5%) 1. The following information pertains to Hepburn Company: Month Sales Purchases January $60,000 $32,000 February $80,000 $40,000 March $100,000 $56,000 Cash is collected from customers in the following manner: - Month of sale 30% - Month following the sale 70% 40% of purchases are paid for in cash in the month of purchase, and the balance is paid the following month. Labour costs are 20% of sales. Other operating costs are $30,000 per month (including $8,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $8,000. A minimum cash balance of $6,000 is required at the end of the month. Money can be borrowed in multiples of $1,000. a. How much cash will be collected from customers in March? (5%) b. How much cash will be paid to suppliers in March? (5%) C. How much cash will be disbursed in total in March? (5%) d. What is the ending cash balance for March after borrowing, if required? (5%) e. What are two advantages of budgets (5%)
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a To calculate the cash collected from customers in March we need to consider sales made in January and February as well as their respective collectio... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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