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The company expects to sell about 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month
The company expects to sell about 20% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder in the next month. Sales are: January Sales were $490,000 February Sales =$500,000 March Sales = $450,000 April Sales = $520,000 Regarding cash payments: Manufacturing costs are expected to be $174, 500 in March and $305,000 in April. Selling and administrative expenses are expected to be $37,000 in March and $37, 500 in April. Income taxes of $40,000 are expected to be paid in April. Capital additions of $250,000 are expected to be paid in March. Regarding beginning balances: Cash on March 1 is $45,000. The minimum cash balance is $20,000
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