Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Introduction To Concepts Methods And Uses

Authors: Clyde P. Stickney, Roman L. Weil

10th Edition

0324183518, 978-0324183511

More Books

Students also viewed these Accounting questions

Question

=+ Where would most corporations like the balance to fall?

Answered: 1 week ago