Question
The following information pertains to Tiffany Company: Month Sales Purchases January $30,000 $16,000 February $40,000 $20,000 March $50,000 $28,000 Cash is collected from customers in
The following information pertains to Tiffany Company:
Month | Sales | Purchases |
January | $30,000 | $16,000 |
February | $40,000 | $20,000 |
March | $50,000 | $28,000 |
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. Labour costs are 20% of sales. Other operating costs are $15,000 per month (including $4,000 of depreciation). Both of these are paid in the month incurred. The cash balance on March 1 is $4,000. A minimum cash balance of $3,000 is required at the end of the month. Money can be borrowed in multiples of $1,000.
How much cash will be collected from customers in March?
How much cash will be paid to suppliers in March?
How much cash will be disbursed in total in March?
What is the ending cash balance for March after borrowing, if required?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started