Question
The following information for the second quarter of 2011 pertains to Huffington Company: Month Sales Purchases April $90,000 $48,000 May $120,000 $60,000 June $150,000 $84,000
The following information for the second quarter of 2011 pertains to Huffington Company:
Month | Sales | Purchases |
April | $90,000 | $48,000 |
May | $120,000 | $60,000 |
June | $150,000 | $84,000 |
* 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.
* Labor costs are 20% of sales. Other operating costs are $45,000 per month (including $12,000 of depreciation). Both of these are paid in the month incurred.
*The cash balance on June 1 is $6,000. A minimum cash balance of $4,500 is required at the end of the month. Money can be borrowed in multiples of $3,000.
*No loans outstanding on June 1.
How much cash will be collected from customers in June?
A.
$129,000
B.
$150,000
C.
$141,000
D.
None of the above is correct.
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