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The following information for the second quarter of 2020 pertains to Washburn 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 2020 pertains to Washburn 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 disbursed for labor and operating costs in June? O a $63,000 O b. $96,400 O c. $88,400 O d. $70,000 What is the ending cash balance for June? O a. ($50,000) O b. $ 6,000 O c. $11,400 O d. $ 5,400
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