Question
Information on the actual sales and inventory purchases of the Law 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 Law Company for the first quarter follow:
Inventory Sales | Purchases | |
January | $120,000 | $60,000 |
February | 100,000 | 78,000 |
March | 130,000 | 90,000 |
Collections from Law 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. Law Company takes full advantage of the 3% 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 $8,000 is depreciation. The remaining operating expenses are variable with respect to the number of sales in dollars. Those operating expenses requiring a cash outlay are paid for during the month incurred. Law Company's cash balance on March 1 was $43,000, and on April 1 was $35,000.
35.What would be the expected cash collections from customers during April? A.$117,600. B.$137,000. C.$139,000. D.$150,000.
36.What would be the expected cash disbursements during April for inventory purchases? A.$87,300. B.$90,000. C.$97,000. D.$100,000.
37.What would be the expected cash disbursements during April for operating expenses? A.$15,000. B.$23,000. C.$30,000. D.$38,000.
38.What would be the expected cash balance on April 30? A.$19,700. B.$28,700. C.$54,700. D.$62,700.
Can you please answer questions 35 to 38 with solutions, please?
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