Question
Morgan Company's budgeted income statement reflects the following amounts: SalesPurchasesExpensesJanuary$119,000$77,000$23,900February109,00065,00024,100March124,00080,25026,900April129,00083,50028,500 Sales are collected 50% in the month of sale, 20% in the month following sale,
Morgan Company's budgeted income statement reflects the following amounts:
SalesPurchasesExpensesJanuary$119,000$77,000$23,900February109,00065,00024,100March124,00080,25026,900April129,00083,50028,500
Sales are collected 50% in the month of sale, 20% in the month following sale, and 29% in the second month following sale. One percent of sales is uncollectible and expensed at the end of the year.
Morgan pays for all purchases in the month following purchase and takes advantage of a 1% discount. The following balances are as of January 1:
Cash$87,000Accounts receivable*57,000Accounts payable71,000
*Of this balance, $22,800 will be collected in January and the remaining amount will be collected in February.
The monthly expense figures include $4,900 of depreciation. The expenses are paid in the month incurred.
Morgan's budgeted cash receipts in February are:
Multiple Choice
- $82,300.
- $112,500.
- $111,590.
- $78,300.
- $112,140.
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