Question
Information on the actual sales and inventory purchases of the Aricent Company for the first quarter follow: Inventory Sales Purchases January $120,000 $60,000 February 100,000
Information on the actual sales and inventory purchases of the Aricent Company for the first quarter follow:
Inventory Sales | Purchases | |
January | $120,000 | $60,000 |
February | 100,000 | 78,000 |
March | 120,000 | 90,000 |
Collections from Aricent Company's customers are normally 60% in the month of sale, 30% in the month following sale, and 8% in the second month following sale. The balance is uncollectible. Aricent Company takes full advantage of the 2% discount allowed on purchases paid for by the end of the following month. The company expects sales in April of $150,000 and inventory purchases of $100,000. Operating expenses for the month of April are expected to be $38,000, of which $15,000 is salaries and $15,000 is depreciation. The remaining operating expenses are variable with respect to the amount of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Aricent Company's cash balance on March 1 was $43,000, and on April 1 remained at $43,000. What would be the expected cash balance on April 30?
$19,700. | ||
$28,700. | ||
$54,700. | ||
$65,800. |
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